The US Treasury has sanctioned Iranian cryptocurrency exchange BitBank, accusing it of processing Bitcoin payments from ships transiting the Strait of Hormuz and funneling the funds to the Islamic Revolutionary Guard Corps — the latest escalation in Washington’s campaign against Iran’s crypto-based sanctions evasion.
By Sarah Park | September 20, 2026
The Hook: Bitcoin Meets Geopolitics
On Thursday, the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against BitBank, alleging that as of June the Hormuz Safe Marine Services Authority used the exchange to transfer payments it received to the IRGC. The Treasury alleged the arrangement is part of the architecture used by Iranian financier Babak Zanjani to move hundreds of millions of dollars in Bitcoin to the powerful military force.
For everyday crypto holders, the story is a window into how governments treat Bitcoin when it crosses into sanctioned territory — and why compliance, not technology, is where the real battles are fought.
How the Alleged Scheme Worked
According to Treasury, the scheme is built around the Strait of Hormuz, the narrow waterway between Iran and Oman through which a large share of the world’s oil passes. The Treasury had previously alleged that Hormuz Safe is part of an IRGC-backed operation forcing vessels to buy maritime insurance for passage — including coverage against seizure by Iran itself. Payments collected through that system were then routed, via BitBank, into Bitcoin and on to the IRGC, the Treasury said.
The new designations cover BitBank, its developer Pishtaz Simorgh Electronic Trade Company, and three associates of Zanjani. Treasury called them “key components of the Iranian regime’s digital assets-based sanctions evasion infrastructure.” Treasury Secretary Scott Bessent did not mince words: “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.”
One important clarification for anyone confused by the name: Iran’s BitBank is a separate entity from bitbank, inc., the fully licensed Japanese crypto exchange founded in 2014, which was acquired by SBI Holdings in June. Treasury’s designation lists the Iranian BitBank as having been established in 2024.
A Year of Tightening Pressure
Thursday’s action fits a pattern of escalating Treasury crackdowns on Iranian digital asset channels:
- June — the US sanctioned four crypto exchanges, including Iran’s largest, Nobitex.
- July — the US government ordered the freezing of more than 130 million USD in USDt held in wallets linked to Iran.
- August — two more digital asset exchanges, Shelbit and Aban Tether, were sanctioned for allegedly assisting sanctions evasion.
- September — BitBank, its developer and three individuals added to the list.
Iran, meanwhile, has been adapting. Earlier this month, the Financial Times reported that Iran’s central bank eased foreign currency controls to encourage businesses to bring overseas earnings home — including through cryptocurrency — as US sanctions tighten.
What This Means for Regular Bitcoin Investors
The obvious question: does this hurt Bitcoin? History suggests not much. Each high-profile sanctions action has reinforced the same reality — Bitcoin’s open network processes transactions regardless of borders, but the off-ramps, the exchanges where crypto becomes spendable money, are very much within regulators’ reach. Sanctioned entities get frozen out of the global liquidity pool, which is exactly what OFAC wants.
For law-abiding holders, the practical takeaway is about where you keep your coins. Regulated exchanges that screen customers and block sanctioned addresses are what separate your funds from this kind of enforcement action. And it’s a reminder that when politicians debate crypto’s role in national security, cases like BitBank are the evidence they point to — which shapes future regulation for everyone.
There is also a broader lesson here about how sanctions enforcement actually works in 2026. Freezing a blockchain is impossible — the Bitcoin network has no off switch. But freezing the people and companies around it is very possible. By designating BitBank and the individuals around Zanjani, OFAC effectively cut them off from the legitimate exchanges, banks and stablecoin issuers that dominate real-world liquidity. The same playbook has been used against Russian entities, North Korean hacking groups and sanctioned mixers: the chain stays open, but the money becomes radioactive and very hard to spend at scale.
The Verdict
The BitBank sanctions show both sides of the Bitcoin story at once: a state using crypto to sidestep the traditional financial system, and the world’s most powerful Treasury demonstrating it can trace and cut off that attempt. For investors, nothing here changes Bitcoin’s fundamentals — but it confirms that the era of crypto operating outside the view of governments is firmly over.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
Hormuz Safe as a branding choice while allegedly moving IRGC money is wild. someone in compliance at that exchange was definitely not getting paid enough
Sanctions are whack-a-mole though. Shut down BitBank and three nested wallets pop up the same week
The naming is barely even hiding it. Shipping tolls in btc through hormuz while Zanjai sits somewhere behind the structure reads like a case study run in plain sight
ships paying btc through hormuz and it lands at the IRGC. chain forensics can map it all day, someone still cashes out somewhere and OFAC keeps playing whack-a-mole
the insurance angle is the nastiest part. paying for coverage against seizure by the same people selling the policy, in btc, through hormuz. that is just extortion with a receipt
whack-a-mole is right, they sanctioned Garantex and volume just shifted to smaller OTC desks. BitBank will get replaced within months
whack-a-mole but slower. OFAC flagged the babak zanjani network back in 2013 for the oil side and he kept operating for a decade. crypto just made the rails faster
watch the ruble and aed desks this time, garantex volume mostly migrated there after the OFAC action. the pattern is predictable at this point
dubai aed desks widened quotes within days of the garantex action, same playbook will run here. istanbul otc is the other corridor worth watching after this OFAC round
Babak Zanjai name in a treasury press release and every compliance desk at every exchange re-runs their screening lists this weekend
credit to treasury for clarifying it is not the japanese bitbank. that confusion was about to nuke an unrelated licensed exchange inbox this morning