US Treasury sanctions individuals, entities linked to Iran’s ‘shadow banking’ system
By Sean Rayment
Two Iranian financiers and more than a dozen individuals and firms across Hong Kong and the United Arab Emirates have been sanctioned by the US for allegedly coordinating $100 million worth of cryptocurrency transfers from the sale of Iranian oil, benefiting Iran’s government and military.
The US Treasury Department alleges that Iranian nationals Alireza Derakhshan and Arash Estaki Alivand facilitated the purchase of over $100 million in cryptocurrency tied to oil sales on behalf of the Iranian government.
According to the Treasury, both men then used a network of front companies across several countries to transfer the cryptocurrency.
So-called shadow banking networks like these attempt to evade sanctions by laundering money through overseas front companies and cryptocurrency channels.
Treasury Under Secretary for Terrorism and Financial Intelligence John K. Hurley said in a statement: “Iranian entities rely on shadow banking networks to evade sanctions and move millions through the international financial system.
Under President Trump’s leadership, we will continue to disrupt these key financial streams that fund Iran’s weapons programs and malign activities in the Middle East and beyond.”
The sanctions were authorised under an executive order issued by President Donald Trump in February, the National Security Presidential Memorandum 2, which calls for the US to “drive Iran’s export of oil to zero” and states that Iran “can never be allowed to acquire or develop nuclear weapons.”
The measures block the individuals and firms from accessing any property or financial assets held in the United States and prohibit American companies and citizens from conducting business with them.
Iran and other sanctioned nations have increasingly turned to cryptocurrency to bypass restrictions. Blockchain analytics firm Chainalysis reported that sanctioned jurisdictions and entities such as Iran received $15.8 billion in cryptocurrency in 2024, representing about 39 per cent of all illicit crypto transactions that year.
The latest US sanctions also follow a move by France, Britain, and Germany, which triggered a snapback mechanismreimposing all United Nations sanctions on Iran over its nuclear programme, accusing Tehran of wilfully breaching the 2015 nuclear deal that had lifted such measures.
Earlier this year, the US and Iran attempted to negotiate a new nuclear deal, but those talks have stalled since the 12-day Israeli bombardment of Iran’s nuclear and military sites and the subsequent US airstrikes on June 22.
The full Treasury statement can be read here: https://home.treasury.gov/news/press-releases/sb0248
