The U.S Treasury confirmed it recently froze $344 million in crypto funds belonging to the Iranian regime.
According to the statement, the exercise was carried out by OFAC (Office of Foreign Assets Control), which implements sanctions, and Tether, the world’s largest stablecoin issuer. The funds were in USDT, hence Tether became crucial in the operation.
Commenting on the same, U.S Treasury Secretary Scott Bessent said they’ll continue to systematically degrade Tehran’s ability to generate and move funds.
He added,
We will follow the money that Tehran is desperately attempting to move outside of the country and target all financial lifelines tied to the regime.
Is Iran’s crypto strategy under threat?
According to security research firm TRM Labs, the U.S targeted two wallets associated with the Central Bank of Iran. The wallets received over $370 million and were linked to Iran’s military and Hezbollah, its proxy in Lebanon.
The wallets became active in 2021, received funds, but have remained dormant since 2023. According to TRM Labs, the wallets acted as “sovereign reserve storage.”
In a statement to AMBCrypto, Ari Redbord, TRM Labs’s Global Head of Policy, hailed the Tether and OFAC move. He added,
This is exactly the kind of public-private disruption needed to take on rogue nation-state actors like Iran
This is part of a broader effort by the U.S to coerce the Iranian regime to come to the negotiation table amid the ongoing West Asia crisis.
The update will likely push the regime to focus on other crypto assets, like Bitcoin, which does not have a freezing backdoor like most stablecoins. In fact, Iran proposed a Bitcoin toll for ships passing through the Strait of Hormuz.
Crypto industry slams banks’ AML comment
That said, Tether has been swiftly responding and freezing funds linked to sanctions and recent hacks involving USDT.
Against this backdrop, the crypto industry has been unhappy with the Bank Policy Institute’s (BPI) latest criticism of the sector. The banking lobby group said,
Banks are held to strict AML (anti-money laundering) standards. Crypto isn’t. Criminals have noticed.
However, Coinbase’s Chief Policy Officer Faryar Shirzad, discredited the claims, stating that crypto illicit activity accounts for only 1-1.2% of overall on-chain activity.
On the contrary, nearly 5% of the global GDP or $2 trillion annually is laundered through the traditional banking system.
Final Summary
- U.S Treasury and Tether froze $344 million in a bid to disrupt the Iranian regime’s financial networks
- While the move underscores the crypto role in sanctions evasion, it also reinforces how centralized stablecoins are being used for enforcement.
