US Sanctions Iran’s BitBank Over Bitcoin Transfers Linked to ‘Hormuz Safe’ Scheme
In June 2024, Iranian crypto exchange BitBank was sanctioned by the US Department of the Treasury for processing Bitcoin payments related to the ‘Hormuz Safe’ scheme, where vessels transiting the Strait of Hormuz paid fees later transferred to the Islamic Revolutionary Guard Corps. This designation aligns with ongoing US efforts to restrict Iran’s financial activities, targeting its use of digital assets to evade sanctions and fund military entities.
Details of US Sanctions on BitBank and Affiliates
On June 8, 2024, the US Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against the Iranian cryptocurrency exchange BitBank. The Treasury highlighted that since June, the Hormuz Safe Marine Services Authority used BitBank to transfer Bitcoin payments to the Islamic Revolutionary Guard Corps (IRGC).
The Treasury alleges BitBank is part of a financial network orchestrated by Iranian financier Babak Zanjani, moving hundreds of millions of dollars in Bitcoin to the IRGC. The sanctions also cover BitBank’s developer, Pishtaz Simorgh Electronic Trade Company, and three associates of Zanjani identified as key players in Iran’s digital asset sanctions evasion architecture.
Background on the Hormuz Safe Scheme
US authorities have described Hormuz Safe as an IRGC-backed operation compelling vessels to purchase maritime insurance for transits through the Strait of Hormuz, including coverage protecting against seizures by Iran itself. Payments from this scheme are reportedly funneled to the IRGC, integrating it into Iran’s military financing network.
Broader Context of Sanctions on Iranian Crypto Operators
The designation of BitBank is part of a wider US campaign to isolate Iran financially, targeting its use of cryptocurrencies for sanctions evasion. Earlier in 2024, the US froze over $130 million USDt linked to Iran and sanctioned other digital asset exchanges, such as Shelbit, Aban Tether in August, and Nobitex, Iran’s largest crypto exchange, in June.
It’s important to note that Iran’s BitBank is distinct from Japan’s licensed crypto exchange bitbank, inc, founded in 2014 and acquired by SBI Holdings in June 2024. The Iranian BitBank reportedly was established in 2024.
Response and Economic Implications
Cointelegraph reached out to BitBank for comment without receiving a response. Amid tightening sanctions and restricted access to international financial systems, Iran has taken steps to mitigate effects — including relaxing foreign currency controls in June 2024 to encourage the repatriation of overseas earnings via cryptocurrencies, as reported by the Financial Times.
Why it matters
The US sanctions on BitBank highlight increased efforts to monitor and counter Iran’s use of cryptocurrencies to circumvent international restrictions, particularly linked to military entities like the IRGC. These actions strengthen pressure on Iran’s financial infrastructure, restricting its ability to raise funds and support strategic operations. Moreover, this approach draws global attention to digital assets as leverage for sanctions enforcement and signals to financial actors the risks involved in dealing with questionable entities.
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