- US prosecutors have filed a civil forfeiture case seeking roughly US$61 million in crypto allegedly linked to sanctioned Iranian oil sales.
- Prosecutors allege Chinese firms and crypto wallets helped move and launder more than US$1.5 billion in illicit Iranian oil proceeds.
- The funds allegedly flowed to Iran and IRGC-linked entities through a network designed to obscure their origin and ownership.
- The case remains at the allegation stage, with a court ultimately deciding whether the US government can keep the funds.
Prosecutors in New York have launched a civil forfeiture case involving roughly US$61 million (AU$85.6 million) in cryptocurrency, alleging the funds trace back to black-market sales of sanctioned Iranian crude oil.
Prosecutors in the Southern District of New York, working alongside the FBI’s New York field office, filed a complaint alleging the money was destined to fund Iran’s government and military – including the Islamic Revolutionary Guard Corps (IRGC), which the US designates as a terrorist organisation.
Deputy US Attorney Sean Buckley didn’t mince words, saying the action shows America’s resolve to deprive Iran and its proxies of the illegal money they rely on to threaten lives.
He pointed to Tehran’s reliance on illicit oil sales to bankroll not just its military but also its nuclear and ballistic missile ambitions, alleging that a web of crypto operators in China and beyond helped launder over US$1.5 billion (AU$2.1 billion) in illicit oil proceeds.
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How the Scheme Allegedly Worked
According to the complaint, two Chinese firms, Blessed Trust and Hexa Whale, used accounts on Binance, the UAE-based exchange, to move the illicit proceeds. Blessed Trust posed as a wealth management and custodial services outfit, while Hexa Whale presented itself as a commodities brokerage.
In reality, prosecutors allege both were funnelling oil proceeds to Iran and its proxies, with Blessed Trust also offering fiat-to-crypto on-ramps via US-based issuers. Their client base reportedly included companies operating in China’s petroleum sector.
Investigators also flagged a cluster of interconnected unhosted wallets, which prosecutors dubbed “Entity A”. They allegedly received and redistributed more than US$1.5 billion linked to Iranian oil sales, sending funds to IRGC-linked money services businesses and an Iranian crypto exchange. Prosecutors say the transactions were deliberately structured to hide where the funds came from and who controlled them.
What’s Next
FBI Assistant Director James Barnacle said the bureau remains committed to tracking down illicit crypto flows wherever they lead. The case is being run by the SDNY’s Illicit Finance and Money Laundering Unit alongside its National Security and International Narcotics Unit, with several assistant US attorneys handling the case.
It’s important to note that a civil forfeiture complaint is just an allegation at this stage and that nothing’s been proven. It’ll be up to a court to decide whether the US government actually gets to keep the seized funds.
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