Stablecoins Tether and Circle’s USDC dominate the market.
Justin Tallis | AFP | Getty Images
The United States has filed a civil forfeiture lawsuit for $61 million in virtual currency as proceeds from the black market sale of sanctioned Iranian crude oil and petroleum products.
The complaint filed by the U.S. Attorney’s Office for the Southern District of New York alleges that the Iranian government used a network of crypto activists from China and elsewhere to launder more than $1.5 billion in illicit oil money intended for the benefit of Iran’s military and Islamic Revolutionary Guard Corps. These proceeds were intended to fund the Iranian government and military sector.
“Today, we are seizing and seeking forfeiture more than $61 million in Iranian government funds that would otherwise have facilitated hostile military actions and terrorist attacks against the United States and our allies,” Acting U.S. Attorney Sean S. Buckley said in a statement.
Two Chinese companies, named Blessed Trust and Hexa Whale, allegedly used trading accounts on the Binance cryptocurrency exchange to “launder the proceeds of the black market sale of Iranian oil and funnel the illicit funds to the Iranian government, its proxies, and/or proxies, where they were used to finance terrorism and other Iranian government activities,” the statement said.
A Binance spokesperson said: “Binance has zero tolerance for sanctions violations or illegal activities, and we do not permit any transactions with sanctioned parties.” “We will continue to work with law enforcement authorities on this matter and will always investigate and, if necessary, restrict or freeze offboard users’ accounts and report to the relevant authorities where sanctions or illicit financial risks are identified.”
Blessed Trust, which described itself as an asset management or virtual asset custody service company, received and sent revenue and offered an “on-ramp” service that allowed users to exchange fiat currency for virtual currency, according to the complaint. These were done, for example, through the use of US-based virtual currency issuers.
Hexa Whale also works with Blessed Trust and its affiliates to provide similar services.
“Blessed Trust and Hexa Whale also used the U.S. financial system to send and receive tens of millions of dollars as part of this scheme,” the complaint alleges.
CNBC could not reach Hexa Whale and Blessed Trust for comment.
The companies’ customers include companies in China’s oil and petroleum products sector.
“Burning” token
According to the indictment, Tether “burns” the cryptocurrency tokens held at the target’s addresses, issues replacement tokens of the same value, and transfers the tokens into U.S. government custody.
Tether did not respond to a request for comment.
In April, the U.S. government imposed sanctions on China’s independent or “teapot” refineries and warned financial institutions that they could face sanctions if they do business with Chinese refineries that process Iranian crude oil.
A September 10 Reuters report also reported that Iran “used barter-like arrangements to circumvent sanctions on oil sales and purchase billions of dollars worth of goods from China.”
China is reportedly one of the largest buyers of Iranian crude oil, accounting for more than 80% of Iran’s crude oil shipments in 2025, or an average of 1.4 million barrels per day.
