US Treasury Targets Iran's Crypto Evasion with Sanctions on Digital Assets

The US Treasury's Office of Foreign Assets Control (OFAC) has formally classified Iran's digital asset sector as sanctionable, following years of enforcement against Tehran's use of Bitcoin and Tether to evade sanctions. According to blockchain analytics firm Chainalysis, Iran's crypto ecosystem reached a staggering $7.8 billion in value last year.

The majority of this activity was linked to wallets tied to the Islamic Revolutionary Guard Corps (IRGC), Iran's primary military branch, which accounted for over half of on-chain activity in the fourth quarter.

OFAC has also accused Iran's central bank of acquiring at least $507 million in Tether, with most of the stablecoin flowing through Nobitex, the country's largest exchange. This setup is described as a 'sanction-resistant reserve' designed to defend the rial, which has lost nearly 90% of its value due to inflation and sanctions.

Since April, Operation Economic Fury has frozen or sanctioned approximately $1 billion in Iran-linked crypto, with Tether blocking $344 million in USDT that month. The Treasury Department's designation relies on Executive Order 13902, which allows OFAC to sanction entire economic sectors rather than individual entities.