The US Attorney for the Southern District of New York has filed a civil forfeiture complaint seeking approximately $61 million in cryptocurrency that prosecutors say came from black-market sales of sanctioned Iranian crude oil and petroleum products.
The complaint alleges that the money was intended to support the Government of Iran and Iranian military bodies, including the Islamic Revolutionary Guard Corps (IRGC), which the US designates as a terrorist organisation. The filing was made on September 14, according to one source.
Deputy United States Attorney Sean S. Buckley and James C. Barnacle, Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation, announced the action. Buckley said the case targets more than $61 million belonging to the Government of Iran that prosecutors say could otherwise have supported hostile military action and terrorist attacks against the US and its allies.
The case concerns a far larger alleged flow of money. Prosecutors say the Iranian government used cryptocurrency actors in China and elsewhere to launder more than $1.5 billion in proceeds from illicit oil sales. They say those funds were meant to benefit the Iranian military and the terror-designated IRGC.
Two Chinese companies named in the complaint, Blessed Trust and Hexa Whale, allegedly used trading accounts at Binance, a cryptocurrency exchange based in the UAE, to launder proceeds from black-market Iranian oil sales. Blessed Trust Limited described itself as a wealth management firm. Hexa Whale Trading Limited described itself as a commodities broker.
According to prosecutors, the money was channelled to the Government of Iran, its agents and/or its proxies. Accounts holding the alleged oil proceeds were also used to transfer cryptocurrency to an Iranian crypto exchange and money transmitters that prosecutors describe as fronts for the IRGC.
The complaint further alleges that entities involved in the scheme used the US financial system to send and receive tens of millions of dollars. It does not identify the cryptocurrency wallets or accounts beyond the two Chinese companies, nor does it name the Iranian exchange or money transmitters said to be IRGC fronts.
Binance is not named as a defendant in the Justice Department complaint. The brief provides no indication of a separate enforcement action against the exchange or of any response by it to the allegations.
A civil forfeiture complaint sets out the government’s allegations against property rather than criminal charges against a named individual. The filing does not state whether the approximately $61 million, or any part of it, has already been seized or frozen. It also does not say whether further charges or indictments are planned, when the alleged transactions occurred, or whether other financial institutions are under investigation.
The matter is being handled by the US Attorney’s Office’s Illicit Finance and Money Laundering Unit and its National Security and International Narcotics Unit. The complaint presents the alleged $61 million as one part of an effort to trace proceeds from sanctioned Iranian oil sales through cryptocurrency intermediaries and trading accounts.
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