OFAC Designates Iran's Digital Asset Sector as Sanctionable Over BTC and USDT Use

Iran’s digital asset sector has been classified as sanctionable by the US Treasury’s Office of Foreign Assets Control (OFAC), cementing a years-long enforcement campaign against Tehran’s use of Bitcoin (BTC) and the stablecoin Tether (USDT) to dodge sanctions.

Chainalysis, a blockchain analytics firm, estimates that Iran’s crypto ecosystem exceeded $7.8 billion last year. More than half of fourth-quarter on-chain activity was tied to wallets linked to the Islamic Revolutionary Guard Corps (IRGC), Iran’s primary military branch.

Central Bank’s USDT Stockpile Bolsters Sanctions Evasion

Elliptic, a blockchain analytics firm, said Iran’s central bank had acquired at least $507 million in USDT, with the purchases traced to leaked 2025 documents. Most of the stablecoin went through Nobitex, the country’s largest exchange, before moving to a cross-chain bridge after a hack in mid-2025.

Researchers view the structure as a reserve built to withstand sanctions, operating outside the conventional dollar framework to shore up the rial after it lost close to 90% of its value amid inflation and sanctions.

Washington Steps Up Freezes and Sector-Wide Sanctions

Since April, Iran-linked crypto worth roughly $1 billion has been frozen or sanctioned under Operation Economic Fury. Tether blocked $344 million in USDT that month. It followed with a further freeze of $131 million in July, after OFAC pointed to central bank wallets holding more than $165 million in stablecoins.

Nobitex, Wallex, Bitpin, and Ramzinex were added to OFAC’s sanctions list in June, together with two Nobitex executives.

On August 24, the office of Treasury Secretary Scott Bessent formally classified digital assets as a sanctionable sector of Iran’s economy. That designation is based on Executive Order 13902, which gives OFAC the authority to sanction whole economic sectors rather than individual entities.

Operation Economic Outcast, the same package, also hit a Ukrainian broker with sanctions for routing crypto oil payments. OFAC said the broker processed over $100 million linked to oil sales for the IRGC’s Quds Force, its foreign paramilitary arm.

“Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.”
— Bessent

Crypto has also been used by Iran to impose tolls on ships passing through the Strait of Hormuz. The IRGC depends on subsidized power to mine bitcoin, turning electricity directly into a currency that is harder to follow.

The friction between Tehran’s stablecoin workarounds and Washington’s ability to freeze assets is expected to continue as blockchain analytics become more advanced.