Prosecutors Move on $61 Million in Alleged Iranian Oil Money

Federal prosecutors in New York have filed a civil forfeiture complaint against roughly $61 million in cryptocurrency, alleging the funds are proceeds from black-market sales of sanctioned Iranian oil.

The money was allegedly meant to finance the Government of Iran and its military, including the Islamic Revolutionary Guard Corps (IRGC), a US-designated terrorist organisation, according to the Justice Department, which announced the filing on Monday.

“Today we are seizing and seeking to forfeit more than $61 million of the Government of Iran’s money, which otherwise would have promoted hostile military action and terrorist attacks against the U.S. and our allies,” said Deputy US Attorney Sean S. Buckley.

How the Alleged Scheme Turned Oil Sales Into Crypto

The case centres on two Hong Kong-incorporated companies, Blessed Trust and Hexa Whale. Prosecutors allege both used trading accounts at Binance to launder the proceeds of Iranian oil sold to buyers in China.

Blessed Trust presented itself as a wealth management or crypto custody firm, and Hexa Whale claimed to be a commodities broker. According to the DOJ, both actually handled proceeds from oil sales and converted cash into crypto for clients in China’s petroleum sector.

The complaint names Chinese “teapot” refineries, independent refiners based in or linked to China, as some of the biggest buyers of black-market Iranian oil. Prosecutors also describe a US banking trail: a Hong Kong client in the petroleum market, identified only as Company-1, allegedly sent about $37.15 million to Hexa Whale in 2024 and about $443.49 million to Blessed Trust between November 2024 and March 2025, via a correspondent account at a New York bank.

A $1.5 Billion Network Behind the Frozen Wallets

The $61 million is only a fraction of what investigators say they uncovered. According to the court complaint, a cluster of at least seven linked crypto addresses, labelled “Entity A,” received and distributed more than $1.5 billion in Iranian oil proceeds.

Those addresses allegedly sent large volumes of crypto to the Iranian exchange Nobitex and to Middle East money transmitters known to be IRGC fronts. One address is reported to have been used by financing infrastructure controlled by Sepehr Energy, a sanctioned front company that organises oil sales for Iran’s armed forces.

Investigators tied the addresses together using public blockchain data, such as which wallet activated a new one and how funds flowed between them.

Why a Stablecoin Issuer Can Freeze Coins in Place

The targeted funds are all held in USDT, a stablecoin designed to maintain a stable value of $1, unlike coins that swing across tables of crypto prices every day.

The bigger difference is who controls it. Bitcoin has no central company that can block a transfer. USDT does: Tether manages the smart contracts, the code that runs the token, and the reserves backing it. That lets Tether freeze tokens at a specific address, so they cannot be moved.

In this case, the ten addresses sit on the TRON blockchain. Tether froze seven of them on June 15, 2025, and the other three on July 26, 2025. Together they hold 61,192,367.59 USDT.

The seizure relies on that same control. Under a warrant issued on September 14, Tether will “burn” the frozen tokens, permanently destroying them, and issue replacement tokens of equal value into an FBI-controlled hardware wallet. The government never needs the original private keys, the secret codes normally required to move crypto.

Binance Says the Case Does Not Target the Exchange

A Binance spokesperson told Cointelegraph that the exchange did not permit transactions with sanctioned individuals and would continue to cooperate with law enforcement, including by investigating, restricting, or freezing accounts where appropriate.

The spokesperson added that the case was not filed against the exchange and does not allege wrongdoing by Binance. The complaint itself notes that Binance collects identity documents when customers open accounts and keeps records of the crypto addresses involved in their transactions.

What Could Happen Next for the Seized Funds

The allegations have not been proven. The US would gain permanent ownership of the funds only if a court rules in its favour, the DOJ says.

The case adds to a broader campaign against Iran’s crypto channels. In August, the Treasury expanded its sanctions framework on Iran to cover the country’s digital asset sector, Cointelegraph reported. The same month, Treasury Secretary Scott Bessent said US seizures of Iranian crypto had passed $1 billion.

Brent crude traded near $107.59 a barrel on Tuesday as the war involving the US, Israel and Iran disrupted Middle East shipments, according to Cointelegraph. High prices could make black-market sales more valuable to Tehran, and tracing their proceeds a bigger priority for investigators. Readers following the latest crypto news may see more filings like this one if the rest of the $1.5 billion trail leads to addresses an issuer can freeze.

Stablecoins Cut Both Ways for Sanctioned Networks

The case exposes a tension at the heart of stablecoins. According to the complaint, Iranian actors often use stablecoins like USDT because they are liquid, settle easily and hold a stable exchange rate. Those are the same qualities that make stablecoins useful for ordinary payments and trading.

But dollar stability comes with a central issuer attached. The balances in this case were frozen more than a year before prosecutors filed their complaint, which kept the money from moving while investigators built their case.

The limits are just as visible. The $61 million equals roughly 4% of the $1.5 billion the network allegedly handled. Public blockchains let investigators follow money after the fact, but a seizure still depends on funds sitting at an address a central issuer can reach. That gap suggests stablecoins are becoming a real checkpoint for sanctions enforcement, just not a complete one.