U.S. Sanctions Iranian Crypto Exchange BitBank Amidst Efforts to Curb Financing for IRGC

U.S. Sanctions Iranian Crypto Exchange BitBank Amid Ongoing Efforts to Cut Off Funding to IRGC

September 17, 2026

In a significant move against illicit financial networks, the U.S. Department of the Treasury has sanctioned the Iranian cryptocurrency exchange BitBank, accusing it of facilitating the transfer of hundreds of millions of dollars in Bitcoin to the Islamic Revolutionary Guard Corps (IRGC). This action, part of the broader Operation Economic Outcast, aims to dismantle financial channels supporting the Tehran regime.

The Office of Foreign Assets Control (OFAC) announced the sanctions on Thursday, linking BitBank’s operations to financier Babak Zanjani, a sanctioned tycoon with deep ties to Iran’s military and political elite. According to official documents, BitBank served as a crucial hub within a digital financial network that has been under scrutiny for its role in processing transactions for state entities.

The sanctions come in the wake of revelations that the maritime firm Hormuz Safe Marine Services Authority, also previously sanctioned, utilized BitBank’s infrastructure to handle Bitcoin payments for port and escort fees from vessels navigating the strategically vital Strait of Hormuz. This method reportedly allowed the firm to evade the international banking system, raising alarms among U.S. regulators.

As part of the punitive measures, all property and interests of BitBank subject to U.S. jurisdiction have been blocked, and any transactions involving U.S. persons or occurring within the United States are now strictly prohibited.

Targeting the Tech Behind the Transactions

In a further escalation, OFAC has expanded its sanctions to include Pishtaz Simorgh Electronic Trade Company, the software development firm responsible for BitBank’s platform. This move underscores the U.S. government’s strategy to not only target the exchange itself but also the technical infrastructure that supports its operations.

Additionally, three associates of Zanjani—Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein, and Seyed Adel Heidari—have also been sanctioned. Legal analysts suggest that this comprehensive approach aims to neutralize the entire ecosystem enabling alternative exchanges across the region.

U.S. Treasury Secretary Scott Bessent emphasized that Iran’s attempts to exploit virtual asset technology fall within OFAC’s enforcement purview. He noted that while previous sanctions had focused on freezing Tehran-linked funds in centralized stablecoins like Tether (USDT), the decentralized nature of Bitcoin necessitated a direct approach to the fiat on-ramps and off-ramps of local exchanges.

Global Implications and Future Guidance

The sanctions against BitBank trigger secondary warnings for global platforms and liquidity providers that maintain commercial ties with the exchange. Data from Chainalysis indicates that such measures often lead to temporary liquidity fragmentation in local over-the-counter (OTC) trading desks, with flagged wallets being marked as high risk across global compliance tools.

The Department of the Treasury has announced plans to continue providing guidance tailored for virtual asset service providers (VASPs) in collaboration with G7 allies and Middle Eastern partners. As the U.S. intensifies its efforts to curb illicit financing, the implications of these sanctions are likely to reverberate throughout the global cryptocurrency landscape.

As the situation develops, stakeholders in the crypto industry are urged to remain vigilant and informed about the evolving regulatory environment.