U.S. Treasury Sanctions Tehran Crypto Exchange for Funding Revolutionary Guard via Strait of Hormuz Fees

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has designated Tehran‑based cryptocurrency exchange BitBank and its software developer, Pishtaz Simorgh Electronic Trade Company, for allegedly moving hundreds of millions of dollars in Bitcoin to Iran’s Islamic Revolutionary Guard Corps (IRGC) and processing fees collected by the Hormuz Safe Marine Services Authority.

Sanctions Details

BitBank, launched in 2024, is accused of transferring Bitcoin proceeds from ships paying for “safe passage” through the Strait of Hormuz to entities controlled by the IRGC, a group designated as a terrorist organization by the United States. The sanctions freeze any BitBank property under U.S. jurisdiction and prohibit U.S. persons from dealing with the exchange.

Secondary Sanctions Threat

OFAC attached secondary sanctions to the designation, meaning foreign firms that process BitBank transactions—such as exchanges in Dubai or banks in Istanbul—could be cut off from the U.S. financial system, even without direct U.S. involvement.

Hormuz Safe Marine Services Authority

The Hormuz Safe Marine Services Authority, created by Iran’s economy ministry, charges tankers $1 million to $2 million for insurance, traffic control, and emergency response services for crossing the Strait. The authority began using BitBank to move the collected fees to regime‑linked entities after being sanctioned itself on July 29.

Compliance Implications

Unlike some prior designations, OFAC did not publish specific cryptocurrency wallet addresses for BitBank, limiting immediate screening for compliance teams. However, the broader message underscores that digital‑asset infrastructure used to fund sanctioned regimes is now within OFAC’s enforcement reach.