The United States Treasury sanctioned an Iranian cryptocurrency exchange Thursday as part of a broader campaign to block the Iranian regime from accessing global financial resources. BitBank, controlled by designated Iranian financier Babak Zanjani, was accused of processing payments from vessels transiting the Strait of Hormuz, a critical global shipping route that Iran has repeatedly threatened to disrupt.
The Treasury said Hormuz Safe Marine Services Authority, which operates under U.S. sanctions, has used BitBank to transfer payments it collected from ships seeking safe passage since June. Treasury Secretary Scott Bessent stated in a statement that the designations “make perfectly clear that efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC’s reach.”
The action targeted not only BitBank but also its developer, Pishtaz Simorgh Electronic Trade Company, and three of Zanjani’s associates: Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein, and Seyed Adel Heidari. The sanctions block all property and interests in property of those designated and generally prohibit U.S. persons from doing business with them.
Why This Matters to Global Trade
Iran has choked maritime traffic through the Strait of Hormuz since February 28, affecting global energy supplies through the vital shipping route. The Trump administration has used military action and sanctions to restore freedom of navigation, though only a handful of vessels compared with pre-war levels currently transit the strait each day.
Zanjani, a 52-year-old Iranian business magnate, was first sanctioned in late January on accusations of financially backing projects supporting Iran’s Islamic Revolutionary Guard Corps and the Iranian regime. Treasury officials have said his digital exchanges have processed large volumes of funds for IRGC-linked entities.
Operation Economic Outcast and Digital Asset Targeting
The BitBank sanctions are part of Operation Economic Outcast, which the Trump administration announced August 24 with the stated goal of severing Iran from foreign sources of funds. The operation represents an escalation in Washington’s use of sanctions and designations to target the Iranian digital asset ecosystem.
U.S. State Department spokesperson Thomas Pigott said in a statement that the United States remains committed to denying the Iranian regime and the IRGC access to resources they use to threaten regional stability, support terrorism, and undermine international security. The Treasury has indicated it will continue to target both the Iranian digital asset ecosystem and international entities that help facilitate it.
Treasury officials have long pursued sanctions against entities involved in cryptocurrency transactions tied to Iran. This latest action demonstrates that the department views digital asset exchanges as a core component of Iran’s ability to evade traditional financial restrictions and move capital internationally.
The designation comes as the Trump administration continues to pressure Iran to return to nuclear negotiations. After unilaterally withdrawing from the Iran nuclear deal in 2018, Trump has pursued a “maximum pressure” strategy that includes both diplomatic and economic measures. Whether sanctions on digital infrastructure will shift Iran’s negotiating position or simply push financial flows deeper underground remains unclear.
The Treasury alleged that BitBank is part of the architecture used by Zanjani to move hundreds of millions of dollars in Bitcoin to the IRGC. The exchange processed funds specifically related to an IRGC-backed scheme in which vessels purchasing maritime insurance for passage through the strait effectively paid fees to Iran. As Washington’s sanctions architecture expands to include digital asset infrastructure, Iran may face mounting obstacles in moving capital without traditional banking channels.
Frequently asked questions
Why did the U.S. Treasury sanction BitBank?
Treasury accused BitBank of processing payments collected by the Hormuz Safe Marine Services Authority from vessels seeking safe passage through the Strait of Hormuz since June.
Who was targeted alongside BitBank in this action?
The sanctions also designated Pishtaz Simorgh Electronic Trade Company (BitBank’s developer) and three associates of Zanjani: Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein, and Seyed Adel Heidari.
What is Operation Economic Outcast?
Operation Economic Outcast is a Trump administration economic campaign announced August 24 with the goal of severing Iran from foreign sources of funds and resources.
Why does the U.S. target cryptocurrency exchanges in Iran sanctions?
Treasury views digital asset exchanges as core infrastructure Iran uses to evade traditional financial restrictions and move capital internationally without banking intermediaries.
