The U.S. Treasury's Office of Foreign Assets Control designated Iranian cryptocurrency exchange BitBank on September 17, 2026, alleging the platform moved hundreds of millions of dollars in Bitcoin to the Islamic Revolutionary Guard Corps between June and July 2026. The sanctions target a network...
"Today's designations of Iranian digital asset infrastructure make perfectly clear that efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC's reach." — Scott Bessent, U.S. Treasury Secretary
The U.S. Treasury's Office of Foreign Assets Control designated Iranian cryptocurrency exchange BitBank on September 17, 2026, alleging the platform moved hundreds of millions of dollars in Bitcoin to the Islamic Revolutionary Guard Corps between June and July 2026. The sanctions target a network controlled by Babak Zanjani, an Iranian financier previously sentenced to death for embezzlement, whose digital asset operations have now been hit by OFAC three times in five months.
BitBank's designation is notable for its connection to Iran's contested Strait of Hormuz toll regime. According to Treasury, Iran's Hormuz Safe Marine Services Authority — which charges commercial vessels $1 million to $2 million for "safe passage" — used BitBank to convert and transfer collected fees to the Iranian state. The case represents the first documented instance of a sovereign actor using cryptocurrency infrastructure to monetize control of an international shipping chokepoint.
The action is the latest in an escalating U.S. campaign that has now sanctioned eight Iranian crypto exchanges, frozen over $1 billion in digital assets since February 2026, and added hundreds of wallet addresses to the Specially Designated Nationals list. According to Chainalysis, state-driven crypto sanctions evasion volume surged 694% in 2025, with Iran-linked networks moving more than $3 billion through digital asset channels that year.
OFAC designated BitBank (also known as BitBank3) on September 17, 2026, under Executive Orders 13224 and 13902. The action targeted the exchange itself, its software developer Pishtaz Simorgh Electronic Trade Company, and three individuals: Mohammad Mahdi Zaker Hossein (Pishtaz Simorgh CEO), Seyed Adel Heidari (Dot One board vice chairman), and Hossein Ali Zaker Hossein (Dot One executive).
According to Treasury, BitBank served as the primary conversion point for Bitcoin received by Iran's Hormuz Safe Marine Services Authority. Between June and July 2026, the platform processed "hundreds of millions of dollars' worth of Bitcoin" destined for the IRGC.
The designation effectively prohibits any U.S. person or entity from transacting with BitBank. Secondary sanctions under E.O. 13902 extend this restriction to foreign financial institutions conducting significant transactions with the designated entities.
BitBank operated as part of a broader digital asset ecosystem called Dot One, which includes an EVM-compatible blockchain (Dot One Smart Chain) with its native DOTO token, and a social platform called MyDot that generated tokens convertible to DOTO. The peer-to-peer marketplace on BitBank facilitated the final conversion step from DOTO tokens to Bitcoin and fiat currency.
The BitBank action is the third OFAC designation targeting entities controlled by Babak Zanjani in 2026:
Wave 1 — January 30, 2026: OFAC designated Zanjani himself, along with two UK-incorporated exchanges: Zedcex Exchange Ltd (incorporated 2022) and Zedxion Exchange Ltd (incorporated May 2021, with Zanjani listed as director and controller). Blockchain analysis by TRM Labs identified approximately $1 billion in IRGC-linked activity flowing through these platforms between 2023 and 2025, with $619 million — roughly 87% of observed volume — occurring in 2024 alone.
Wave 2 — July 24, 2026: Treasury sanctioned entities in the Dot One ecosystem, the parent corporate structure above Pishtaz Simorgh and BitBank.
Wave 3 — September 17, 2026: The BitBank designation, targeting the operational exchange layer and its software provider.
Zanjani's background adds complexity to the case. Sentenced to death by an Iranian court in 2016 for embezzling from the National Iranian Oil Company, his sentence was commuted in 2024. He subsequently reemerged as a backer of government-linked economic projects and digital asset ventures, according to TRM Labs.
The three-wave pattern — moving from the network controller and offshore exchanges, to the corporate parent, to the domestic operational infrastructure — mirrors OFAC's broader enforcement strategy against Iranian crypto infrastructure in 2026.
The most significant aspect of the BitBank case is its link to the Strait of Hormuz, through which approximately 20% of global oil supply transited before the 2026 crisis. Iran began imposing tolls on commercial vessels in early 2026, charging between $1 million and $2 million per vessel depending on ship size, cargo type, and volume. Fully laden crude tankers sat at the top of that range.
According to a Bloomberg report from April 2026, ships were paying Iran tolls in both Chinese yuan and cryptocurrency. The Treasury's September designation provides the first official U.S. confirmation that Bitcoin specifically was used to settle Hormuz transit fees, and that a domestic Iranian exchange — BitBank — served as the conversion and transfer mechanism.
The scale of the Hormuz toll operation, while not fully quantified by Treasury, can be estimated from available traffic data. Before the crisis, approximately 100 vessels transited the strait daily. Even with traffic declining sharply — Al Jazeera reported a 95% drop in Hormuz transits at certain points during the 2026 crisis — the remaining vessel traffic at $1–2 million per transit generates substantial revenue. CNBC reported in July that more than 8 million barrels of oil transited Hormuz on a single day with U.S. military assistance, indicating continued traffic despite the conflict.
The United Nations' International Maritime Organization has stated that "there is no international agreement where tolls can be introduced for transiting international straits" and warned that Iran's tolls "will set a dangerous precedent."
The BitBank action is part of a sustained U.S. campaign designated "Operation Economic Outcast" (preceded by "Operation Economic Fury" launched in April 2026) targeting Iran's digital asset infrastructure.
Exchange Designations: On June 2, 2026, OFAC designated Iran's four largest domestic exchanges — Nobitex, Bit Pin, Wallex, and Ramzinex — which collectively handled $7.7 billion in 2025 volume, or 78% of Iran's total. Nobitex alone processed $4.7 billion, representing more than 50% of Iran's crypto inflows. The exchange served 11 million registered users. OFAC also designated Nobitex CEO Seyed Ali Khoee and Chairman Amir Hossein Rad.
Asset Freezes: Treasury has frozen over $1 billion in Iranian-linked digital assets since February 2026. Specific actions include a $344 million USDT freeze in April 2026 across two Tron wallets linked to the Central Bank of Iran, and an additional $131 million USDT freeze in July 2026 from four Tron wallets.
ISIS-Related Actions: In July 2026, OFAC also designated 134 cryptocurrency wallet addresses — 131 on Tron and 3 on Monero — linked to ISIS-Khorasan, demonstrating the expanding scope of crypto-related sanctions beyond Iranian state actors.
Including BitBank, OFAC has now designated at least eight Iranian cryptocurrency exchanges in 2026. Iran's total attributed crypto volume reached $9.9 billion in 2025, according to data cited by TRM Labs. Iranian crypto outflows reached $4.18 billion in 2025, a 70% year-over-year increase, driven in part by a 40% devaluation of the Iranian rial against the U.S. dollar.
The BitBank case sits within a broader trend identified by blockchain analytics firms. Chainalysis's 2026 Crypto Crime Report found that illicit cryptocurrency addresses received at least $154 billion in 2025, a 162% increase from 2024. Of that total, $104 billion was tied to sanctioned entities.
State-driven sanctions evasion volume surged 694% in 2025, according to Chainalysis, making it the dominant category of crypto-related illicit activity. Iran, Russia, and North Korea were the primary actors.
Iran-specific data from Chainalysis shows IRGC and its proxy networks accounted for more than 50% of Iran's crypto value received in Q4 2025, totaling over $3 billion in transfers throughout the year. The technical infrastructure relies heavily on the Tron blockchain for USDT transfers — the dominant stablecoin for Iranian sanctions evasion — while Bitcoin remains preferred for larger transactions.
The offshore exchange CoinEx has processed $3.84 billion in Iran-linked flows since 2019, according to a Wall Street Journal investigation published June 24, 2026. CoinEx had not been sanctioned as of that report's publication date.
The BitBank designation carries several implications for the broader crypto industry:
Expanded liability scope. The designation of Pishtaz Simorgh — BitBank's software developer — extends sanctions liability to technology providers, not just exchange operators. This represents a broadening of OFAC's targeting from financial intermediaries to infrastructure builders.
P2P marketplace vulnerability. BitBank's peer-to-peer marketplace model does not insulate it from sanctions. The designation confirms that decentralized or semi-decentralized trading mechanisms do not create a compliance safe harbor.
Geopolitical-crypto convergence. The Hormuz connection demonstrates that cryptocurrency is now embedded in state-level geopolitical operations, not merely used for retail sanctions evasion. The conversion of physical toll revenue from an international shipping chokepoint into Bitcoin represents a qualitative escalation.
Secondary sanctions pressure. Foreign financial institutions face secondary sanctions risk under E.O. 13902 for facilitating significant transactions with designated Iranian exchanges, increasing compliance burdens for global crypto service providers.
The BitBank designation underscores that cryptocurrency infrastructure has become a front in geopolitical conflict. The conversion of Strait of Hormuz toll revenue into Bitcoin — processed through a domestically operated exchange and routed to the IRGC — represents an operational integration of digital assets into state financial architecture that goes beyond the opportunistic sanctions evasion documented in prior years.
Treasury's three-wave approach to dismantling the Zanjani network — controller, corporate parent, then operational exchange — suggests a systematic strategy. The simultaneous targeting of BitBank's software developer signals that OFAC is willing to trace sanctions liability upstream to technology providers.
Whether this enforcement campaign materially reduces Iran's ability to use crypto for sanctions evasion remains unclear. With $9.9 billion in attributed volume in 2025 and multiple offshore platforms still operational, the infrastructure for state-level crypto usage appears to have outpaced enforcement capacity. The Hormuz toll case, however, provides a concrete demonstration of how physical-world geopolitical leverage can be monetized through digital asset infrastructure — a development that compliance teams, regulators, and policymakers are likely to reference for years.