US Sanctions Bitcoin Exchange for Handling Iran’s Hormuz Transit Fees

The U.S. Treasury’s Office of Foreign Asset Control has identified and sanctioned an Iranian <a href="https://xpertsstudio.com/bitcoin-could-get-more-support-than-gold-as-etf-hedging-eases-jpmorgan/” title=”Bitcoin Could Get More Support Than Gold as ETF Hedging Eases: JPMorgan”>bitcoin exchange linked to the “Hormuz Safe Marine Services Authority,” a front company that enables the Islamic Revolutionary Guard Corps’ fee-for-transit scheme for the Strait of Hormuz. 

In March, just weeks after the U.S.-Israeli strikes began, Iranian forces began an informal practice of charging safe-passage fees for the Strait of Hormuz at a rumored rate of up to $2 million per transit. This was later formalized as an “insurance” fee payment, handled by “Hormuz Safe” and the similar “Persian Gulf Marine Insurance Company.” 

Both of these organizations were sanctioned by OFAC in July for facilitating the IRGC’s finances. “Hormuz Safe generates revenue on behalf of the IRGC in an attempt to give the regime tighter control over shipping activity,” warned the Treasury at the time. 

HormuzSafe advertises itself as a modern “digital insurance” company, purporting to offer legitimate services for transits through the strait – for example, salvage towing in the event of an emergency. It offers owners the opportunity to “sail through with complete confidence” with a “99.9 percent safe transit rate.” It accepted payments in Bitcoin, various dollar-linked stablecoins, credit cards and wire transfers.

In a follow-up action announced Thursday, the Treasury said that it was also sanctioning BitBank, a cryptocurrency handling service used by HormuzSafe to process payments. BitBank is part of the ecosystem of financial-services companies tied to Babak Zanjani, a regime insider who was sentenced to death in 2016 for stealing from the National Iranian Oil Company. He was later released and allowed to build front companies and money-laundering tools to move funds for the regime, according to the Treasury. Per OFAC, “Zanjani’s enterprises have served as both public?facing commercial ventures and covert financial platforms enabling sanctions evasion and support to Iranian state?linked entities.” 

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One such Zanjani enterprise, the agency says, is BitBank. He has personally promoted it on social media, giving it a public face as a currency exchange. In private BitBank moved hundreds of millions of dollars in Bitcoin to the IRGC at Zanjani’s instruction

OFAC has now sanctioned Pishtaz Simorgh Electronic Trade Company, the developer of BitBank’s software; and three executives of Zanjani’s digital finance empire, Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein, and Seyed Adel Heidari. Zanjani himself is already sanctioned, along with his holding company, Dot One. 

“Efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC’s reach,” said Secretary of the Treasury Scott Bessent in a statement. “If you support the Iranian regime, the Department of the Treasury will sanction you.”

Source: maritime-executive.com