US Treasury Sanctions 2 Iran-Linked Crypto Exchanges in $5M Money-Laundering Case

Key Takeaways:

• Shelbit, Aban Tether, and Siavash Kayvanpour, a cryptocurrency operator, were sanctioned by OFAC.
• The U.S. authorities accused the network of assisting in the evasion of sanctions and linkages to the IRGC.
• The action blocks U.S.-related property and transactions with designated entities.

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The U.S. Treasury Department has heightened its pressure on Iranian crypto networks accusing exchanges and companies of helping to launder shady digital funds. The new move adds a new strain on crypto platforms that conduct business in and with Iran’s financial sector.

The Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on August 7 against two digital asset exchanges, Shelbit and Aban Tether, along with Siavash Kayvanpour, whom authorities identified as a key figure behind a network of companies involved in illicit crypto activity.

The network enabled the transfer and anonymisation of digital assets linked to Iran’s Islamic Revolutionary Guard Corps (IRGC) and played a role in sanctions-evasion activities, Treasury said.

In total, IRGC controlled crypto addresses sent over $1 million to wallets associated with Shelbit, the agency said. In total, over $2 million was sent from addresses associated with Shelbit to wallets in the hands of the IRGC.

Kayvanpour addresses also wired over $2 million in crypto to Nobitex, an Iranian exchange that prior to this incident was banned by the U.S. government.

The Treasury also claimed that Shelbit processed tens of millions of dollars in digital assets linked to an online gambling website in Persian. Those flows were used to mask the source of the money, the agency said.

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OFAC also separately designated Iran-based digital currency exchange Aban Tether. The platform has reportedly conducted millions of dollars worth of transactions with such previously sanctioned Iranian exchanges as Nobitex, Wallex, Bitpin and Ramzinex.

It was designated in Executive Order 13902, which empowers the U.S. government to impose designations on companies that operate in Iran’s financial sector.

In the case of the sanctions, property and interests in property of any of the designated entities and interests controlled by U.S. persons are blocked. Band trading in those assets will normally not be allowed without an OFAC authorization or exemption.

The restrictions can also extend to entities owned 50% or more, directly or indirectly, by blocked persons.

The Treasury Secretary Scott Bessent said the department already is working to disrupt illegal financial networks, whether they are tied to traditional currencies or cryptocurrencies.

The action was linked to the IRS Criminal Investigation, and the State Department’s Rewards for Justice program has been promising up to $15 Million for information that can disrupt the IRGC’s financial mechanisms.

The decision underlines the critical role that sanctions screening, wallet surveillance, and transaction checks will play in crypto businesses and exchanges engaging with entities linked to high-risk countries.

Read More: UK Sanctions Hit Huobi Global S.A., HTX Says Exchange Operations and User Funds Remain Safe

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