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U.S. Department of Justice file to forfeit $61 million in crypto generated from oil sales linked to Iran accuses Binance, funneled Binace of funnelingh over $1.5 billion in oil proceeds, full story, background details

U.S. Department of Justice on Monday, filed a civil forfeiture complaint seeking $61.5 million in cryptocurrency, specifically USDT held in ten TRON addresses, alleging the funds are proceeds from sanctioned Iranian oil sales.

The complaint, filed by the U.S. Attorney’s Office for the Southern District of New York, targets the digital assets in rem rather than naming any exchange as a defendant.

Prosecutors allege that two Chinese companies, Blessed Trust and Hexa Whale, used trading accounts on Binance to launder the illicit funds. These firms allegedly converted fiat payments from Chinese buyers of Iranian crude oil into cryptocurrency.

The $61.5 million targeted in the civil complaint represents a portion of the scheme's active balances. As part of the seizure procedure, stablecoin issuer Tether agreed to freeze and destroy the flagged tokens sitting in the illicit wallets, subsequently re-minting an equivalent value directly to U.S. federal custody.

While the complaint highlights Binance as the platform where the laundering allegedly occurred, Binance is not named as a defendant. The exchange said in a statement it does not permit transactions with sanctioned individuals, is cooperating with law enforcement, and had already frozen the targeted accounts.

"We will continue to cooperate with law enforcement on this matter, and where sanctions or illicit-finance risk is identified, we will always investigate, restrict or freeze accounts where appropriate, offboard users, and report to relevant authorities," Binance said.

The $61.5 million represents only a fraction of a larger network internally dubbed “Entity A,” which prosecutors claim processed over $1.5 billion in illicit oil proceeds through unhosted wallets, an Iranian exchange, and accounts linked to the Islamic Revolutionary Guard Corps (IRGC).

The government asserts the money was funneled to the Iranian government, its military components, and the IRGC, a U.S.-designated terrorist organization, to finance hostile military actions and terrorist activities against the U.S. and its allies. The FBI and multiple Justice Department units are assisting in the ongoing investigation.

The filing reflects heightened U.S. oversight targeting "shadow fleet" oil exports used by state actors to bypass energy sanctions, with particular focus on off-ramp crypto protocols and unhosted wallet networks. It underscores the U.S. government’s increasing reliance on blockchain analysis to enforce sanctions and disrupt revenue streams for state-sponsored entities.

On September 15, 2026, federal prosecutors with the U.S. Attorney’s Office for the Southern District of New York (SDNY) filed a civil forfeiture action targeting $61.5 million in USDT (Tether) cryptocurrency tied to illegal Iranian crude oil sales. The broader enforcement effort uncovered a $1.5 billion shadow network that processed proceeds from illicit petroleum transactions to fund Iran’s government and its military arms, including the Islamic Revolutionary Guard Corps (IRGC).

The Full Story & Key Allegations

The Mechanics of the Laundering Scheme

According to the DOJ filing, two primary shell entities acted as financial intermediaries for black-market Iranian crude oil buyers in China:

• Blessed Trust Limited: A company publicly posing as a wealth management and crypto-custody firm.

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• Hexa Whale Trading Limited: A entity publicly operating as a commodities brokerage.

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Both entities set up trading accounts on Binance to convert fiat currency into crypto assets and layer funds across a complex web of unhosted wallets (referred to in court documents as "Entity A"). Over $1.5 billion moved through these channels into IRGC-linked money services, Iranian crypto exchanges, and unhosted wallets.

The Forfeiture Mechanism & Tether Assistance

Binance's Role & Corporate Response

• No Direct Wrongdoing Alleged: Prosecutors did not charge Binance with criminal misconduct or accuse it of knowingly orchestrating the scheme. Rather, prosecutors detailed how the criminal network exploited Binance’s platform liquidity.

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• Preemptive Account Offboarding: Binance stated that it had already offboarded Hexa Whale and Blessed Trust prior to the filing after internal compliance units detected suspicious activity.

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• Official Statement: Binance affirmed its commitment to cooperating with federal investigators:

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Background Context

• Historical Compliance Scrutiny: This enforcement builds upon prior regulatory scrutiny over Binance's anti-money laundering (AML) controls. In late 2023, Binance reached a historical $4.3 billion settlement with the U.S. Department of the Treasury and DOJ over sanctions compliance failures.

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• Increased Sanctions Enforcement: