Forcing ships to buy insurance for safe passage through one of the world’s busiest waterways, then collecting the premiums in Bitcoin and funneling them to a designated terrorist organization. That’s the allegation at the center of Washington’s latest crypto sanctions action.
The US Department of the Treasury’s Office of Foreign Assets Control has announced sanctions against Iranian crypto exchange BitBank, accusing it of processing Bitcoin payments collected by the Hormuz Safe Marine Services Authority and routing those funds to the Islamic Revolutionary Guard Corps. Treasury says the scheme has been running since at least June 2026, and that it forms part of a broader financial network built by Iranian financier Babak Zanjani to move hundreds of millions of dollars in Bitcoin to the IRGC.
The Hormuz Safe program is not new to US regulators. Treasury has previously alleged it’s an IRGC-backed racket that pressures ships transiting the Strait of Hormuz into buying maritime insurance, including coverage against seizure by Iran itself. The addition of crypto as a payment rail makes the operation harder to track and block through conventional banking channels. That’s exactly the point.
The OFAC designations cover BitBank, its developer Pishtaz Simorgh Electronic Trade Company, and three associates of Zanjani. Treasury Secretary Scott Bessent made the message plain: “Efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC’s reach.” It’s a direct shot at the assumption, still held in some corners of the crypto industry, that decentralized infrastructure is somehow sanction-proof.
For privacy advocates and crypto users paying attention, this action is part of a much larger pattern. In August, the US sanctioned two other exchanges, Shelbit and Aban Tether, for helping Iran dodge financial restrictions. In June, four more exchanges were sanctioned, including Nobitex, Iran’s largest. In July, over $130 million in Tether held in Iran-linked wallets was ordered frozen. Washington is building out an enforcement doctrine that treats crypto exchanges as financial institutions, subject to the same compliance obligations and the same penalties for failure.
Iran, for its part, has been adapting. The Financial Times reported earlier this month that Iran’s central bank loosened foreign currency controls to encourage businesses to repatriate overseas earnings, including through cryptocurrency. So while the US tightens the net, Tehran is quietly making crypto a more central part of its financial strategy.
One clarification worth making: Iran’s BitBank has nothing to do with bitbank, inc., the fully licensed Japanese exchange founded in 2014 and acquired by SBI Holdings in June. Treasury lists the Iranian entity as established in 2024. Two very different companies, one very unfortunate name overlap.
The broader question this raises is a familiar one. Crypto was built on the promise of censorship-resistant, permissionless transactions. But that same property is what makes it attractive to sanctioned states. And every time a new exchange gets designated, it’s a reminder that the infrastructure is only as private as the least-compliant actor in the chain.