U.S. prosecutors are seeking forfeiture of roughly $61 million in cryptocurrency allegedly generated through sanctioned Iranian oil sales. The civil forfeiture complaint was filed September 14 by the U.S. Attorney's Office for the Southern District of New York.
The case targets USDT held across 10 cryptocurrency addresses. Prosecutors allege the funds represent proceeds intended to finance the Iranian government and military organizations, including the Islamic Revolutionary Guard Corps (IRGC), designated as a foreign terrorist organization by the U.S.
According to the complaint, Tether will burn the targeted tokens and issue replacement tokens of equivalent value for transfer into U.S. government custody.
Broader Laundering Network
The targeted assets are linked to a much larger alleged operation. Deputy U.S. Attorney Sean S. Buckley stated that Iran used a network of cryptocurrency actors in China and elsewhere to launder more than $1.5 billion in illicit oil money intended to benefit the Iranian military and the IRGC.
Two Chinese companies, Blessed Trust and Hexa Whale, allegedly played central roles in the scheme. Prosecutors claim both companies used trading accounts at UAE-based crypto exchange Binance to transfer funds to the Iranian government and its agents.
Binance previously stated that it investigated and removed Hexa Whale in August 2025 and disabled Blessed Trust in January. The exchange maintained that, to its knowledge, no Binance account transacted directly with an Iran-based entity.
Blockchain Evidence and Stablecoin Controls
Public blockchain records helped investigators map the transaction history. A collection of cryptocurrency addresses prosecutors call "Entity A" allegedly received and distributed more than $1.5 billion in proceeds from illicit Iranian oil sales. The funds reportedly flowed to IRGC-linked money services businesses, IRGC-related crypto addresses, and an Iranian cryptocurrency exchange.
The case demonstrates how stablecoin issuers can enforce sanctions by freezing, burning, or reissuing tokens. The targeted assets are USDT on the TRON blockchain, where transaction details are recorded on a public ledger.
Part of Expanded Enforcement Campaign
This forfeiture action follows multiple U.S. measures targeting cryptocurrency linked to Iran's oil trade. In August, the Treasury Department expanded sanctions exposure across Iran's digital asset sector while targeting a broker accused of processing more than $100 million in crypto payments tied to Iranian oil sales.
The U.S. has broadened its enforcement efforts against Iran-linked digital assets throughout 2026. Prosecutors must establish their forfeiture claims in court before the assets are legally awarded to the United States.
