U.S. federal prosecutors are seeking civil forfeiture of about $61 million in cryptocurrency they believe is linked to proceeds from Iran’s black-market oil sales. Prosecutors argued the funds could have been delivered for use by Iran’s government, military and the Islamic Revolutionary Guard Corps (IRGC).

On Sept. 15, local time, the U.S. Attorney’s Office for the Southern District of New York under the Justice Department and multiple foreign media outlets said prosecutors filed a civil forfeiture lawsuit on Sept. 14 over about $61 million in cryptocurrency tied to black-market proceeds from sales of sanctioned Iranian crude oil and petroleum products. Prosecutors said they view the targeted funds as intended to provide financing to Iran’s government and military organizations.

According to the complaint, China-linked companies Blessed Trust and Hexa Whale were identified as having used Binance trading accounts to convert and launder proceeds from Iranian crude sales into cryptocurrency. Prosecutors alleged the two companies were involved in sending funds to Iran’s government and its agents or affiliated organizations. Prosecutors said Blessed Trust presented itself as an asset management or virtual-asset custody firm and Hexa Whale as a commodities broker, but in fact supported the conversion of proceeds from sales of Iranian crude and petroleum products into cryptocurrency.

Prosecutors also identified interconnected cryptocurrency wallets as "Entity A". The wallet network received and distributed more than $1.5 billion in proceeds from Iranian crude sales, and sent funds to a money services business linked to the IRGC, to cryptocurrency addresses and to cryptocurrency exchanges inside Iran, the complaint said. Prosecutors alleged multiple transactions and cryptocurrency addresses were used in the process to conceal the nature, source and ownership of the funds.

The more than $1.5 billion refers to the overall flow of funds tracked by prosecutors and is separate from the roughly $61 million targeted in the civil forfeiture. The U.S. Department of Justice said a civil forfeiture complaint is only a legal claim against property alleged to be tied to crime or criminal proceeds, and the allegations are not proven facts unless and until a court rules for the U.S. government.

Binance was not directly named as a defendant in the case. Richard Teng (리처드 텡), Binance's chief executive, said on X on Sept. 15 that the case was not filed against Binance and does not allege wrongdoing by Binance. He said Binance applies a zero-tolerance policy toward sanctions violations or illicit activity and did not permit any transactions with sanctioned individuals. Binance added that it is cooperating with law enforcement agencies.

Binance said it had previously conducted internal investigations into Blessed Trust and Hexa Whale over suspicions related to Iran-linked transactions and removed the two firms from the platform. Binance said in March, in response to allegations raised by U.S. Senator Richard Blumenthal (리처드 블루멘솔), it disputed the claims by saying the coverage included inaccurate or defamatory assertions, and explained its investigation into the two firms was carried out proactively in response to inquiries from law enforcement agencies.

The United States is also tightening enforcement against Iran related to digital assets. The Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned digital asset exchanges and others on Aug. 7 that it said were used by the Iranian regime for money laundering and sanctions evasion. It then expanded sanctions risk on Aug. 24 to five Iranian economic sectors, including digital assets, and strengthened the basis for sanctions against foreign companies and individuals that operate in or provide related services to Iran’s digital asset sector.

In July, the Treasury Department also pointed to moves to evade sanctions related to digital-asset payments for vessels transiting Iran’s straits. The department said "Hormuz Safe," developed by Iran’s Ministry of Economy, sought to circumvent sanctions by accepting bitcoin and other digital assets as a means of payment.

As Bloomberg's article notes, this case was not filed against @binance and does not allege any wrongdoing by Binance. Let me be clear: We have zero tolerance for sanctions violations or illicit activity, and we did not permit any transactions with sanctioned individuals. We… https://t.co/sNZmZv1ep8