DOJ Targets $61 Million as Crypto Becomes Part of Iran Sanctions Fight

The US Department of Justice is seeking to seize more than $61 million in Tether’s USDT, alleging the stablecoin represents proceeds from the black-market sale of sanctioned Iranian oil and was ultimately intended to support Iran’s government and military, including the Islamic Revolutionary Guard Corps (IRGC).

But the $61 million targeted in the case may be only a fraction of the money prosecutors say moved through the broader network.

In a civil forfeiture complaint filed in New York, the DOJ alleged that Chinese companies Blessed Trust and Hexa Whale used trading accounts at Binance to move proceeds from Iranian crude oil and petroleum-product sales to buyers in China. Prosecutors identified a group of interconnected cryptocurrency addresses that they say received and distributed more than $1.5 billion in proceeds from the alleged oil sales.

The network allegedly sent funds to IRGC-related money-transfer businesses, cryptocurrency addresses and an Iranian crypto exchange, with transactions structured to obscure the source and ownership of the money.

The allegations have not been proven. In a civil forfeiture case, the government must establish that the assets are subject to forfeiture before it can permanently take ownership.

Tether Had Already Frozen the USDT

The case also highlights one of the most powerful features of centralized stablecoins: the ability of their issuers to freeze tokens at specific blockchain addresses.

According to the DOJ complaint, Tether had already frozen approximately 61.19 million USDT held across 10 addresses on the Tron network. The assets were connected to the addresses that prosecutors are now seeking to forfeit.

A seizure warrant authorizes the FBI to take control of the frozen tokens by having Tether destroy the existing USDT and issue an equivalent amount to an FBI-controlled wallet.

That mechanism turns the stablecoin issuer into a critical part of the enforcement process. The tokens remain visible on the blockchain, but the ability to move or redeem them can ultimately be restricted at the issuer level.

Binance, meanwhile, said it does not permit transactions involving sanctioned individuals and continues to cooperate with law enforcement. A spokesperson said the exchange was not a defendant in the case and that the DOJ complaint did not allege wrongdoing by Binance.

The DOJ's allegations instead focus on the companies and individuals prosecutors say used Binance accounts as part of the alleged money trail. Cointelegraph contacted Tether for comment but had not received a response by publication.

Washington Is Following Iran’s Money Into Crypto

The forfeiture action comes as the US expands its efforts to cut Iran off from international sources of revenue, including digital assets.

In August, the Treasury Department targeted crypto exchanges and networks it said were helping the Iranian regime move money, evade sanctions and support the IRGC. Treasury has also alleged that UAE-based broker Ivan Obukhov processed more than $100 million in cryptocurrency payments since 2023 to facilitate Iranian oil sales on behalf of the IRGC’s Quds Force.

The latest DOJ case shows how those concerns are increasingly intersecting with the global oil trade.

Iran has long relied on networks of intermediaries, shipping companies and financial facilitators to move sanctioned oil and access foreign currency. Prosecutors now allege that cryptocurrency infrastructure formed another layer of that system, allowing oil proceeds to move through exchanges and unhosted wallets before reaching Iran-linked entities.

The timing adds another layer of significance.

The ongoing conflict involving the US, Israel and Iran has already disrupted oil infrastructure and shipping routes across the Middle East, while attacks on Saudi energy infrastructure have added further pressure to global crude supplies. Reuters reported Tuesday that Saudi Arabia's East-West pipeline remained offline following attacks blamed on Iran-aligned forces, while renewed Houthi attacks added to concerns over regional energy security.

Oil prices have consequently remained above $100 a barrel, with Brent crude recently trading above $108 and West Texas Intermediate above $103. For Washington, the latest crypto forfeiture is therefore about more than $61 million.

It is another example of US authorities attempting to follow Iranian oil money beyond traditional banks and into the digital-asset networks that prosecutors say have become part of the regime’s financial infrastructure.

And if the alleged $1.5 billion network is any indication, the $61 million at the center of this case may represent only one piece of a much larger crypto-linked sanctions battle.