Treasury Traces Crypto Chains to Starve Iran's Sanctions-Busting Network

The U.S. government has intensified its efforts to block Iran’s ability to circumvent sanctions by sanctioning a network of Iranian financiers and overseas entities involved in cryptocurrency transactions tied to oil sales. The Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Alireza Derakhshan and Arash Estaki Alivand, two Iranian nationals, along with a dozen individuals and firms operating in China Hong Kong and the United Arab Emirates. These entities were found to have coordinated over US$100 million in cryptocurrency transfers related to Iranian oil exports between 2023 and 2025, with the broader network handling over US$600 million in total inflows. The Treasury cited the use of so-called “shadow banking” networks—consisting of front companies and cryptocurrency laundering—to evade U.S. and international sanctions.

The Treasury’s actions are rooted in President Donald Trump’s National Security Presidential Memorandum 2, which aims to reduce Iran’s oil exports to zero and prevent the country from developing nuclear weapons. Treasury Under Secretary for Terrorism and Financial Intelligence John K. Hurley emphasized that the U.S. is committed to disrupting financial flows that support Iran’s weapons programs and its regional destabilization activities. The sanctions block access to U.S.-held property and assets and prohibit U.S. businesses and citizens from engaging with the designated individuals and firms.

Iran’s reliance on cryptocurrency to bypass sanctions has grown significantly. According to Chainalysis, sanctioned jurisdictions and entities, including Iran, received US$15.8 billion in cryptocurrency in 2024, representing 39% of all illicit crypto transactions globally. The Treasury’s targeting of this network underscores the increasing sophistication of sanctions evasion tactics, with Iran leveraging both traditional front companies and digital assets to obscure the flow of funds. Alivand and Derakhshan were also linked to previously sanctioned entities, including those associated with Hezbollah and Houthi financial operations, further indicating the interconnected nature of these networks.

The move comes amid renewed geopolitical tensions and the reimposition of UN sanctions on Iran. France, Britain, and Germany activated a “snapback mechanism” to reinstate all UN sanctions, citing Iran’s violations of the 2015 nuclear deal. Meanwhile, U.S.-Iran negotiations on a new nuclear agreement have stalled since the June 2025 bombardment of Iranian nuclear and military sites by Israel and the U.S. The Treasury’s latest actions reflect a broader strategy to counter Iranian financial networks, particularly those linked to the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF), which is designated as a foreign terrorist organization under U.S. law.

The designation of specific cryptocurrency addresses used by Alivand and Derakhshan highlights the Treasury’s growing capacity to trace and disrupt digital financial flows. This includes Ethereum and Tron addresses that have been linked to Iranian oil transactions and further interactions with mainstream Iranian exchanges. By leveraging blockchain transparency, authorities have demonstrated a new level of precision in targeting complex financial operations. The Treasury continues to update its screening tools to monitor and block additional entities connected to these networks, signaling a long-term strategy to curtail Iran’s illicit financial capabilities.