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.
