Iran has been dodging sanctions by accepting pay in Bitcoin from ships passing through the Strait of Hormuz, according to a Friday announcement from the U.S. Treasury’s Office of Foreign Assets Control.
The OFAC sanctioned the companies tied to the Iranian regime accused of doing so. Ships have barely been passing through the strategic Strait of Hormuz, where a fifth of the world’s oil passes through, since the U.S. and Israel attacked Iran in February.
In the statement, OFAC said that Hormuz Safe, developed by Iran’s Ministry of Economy, “accepts payment in Bitcoin and other digital assets” so it can bypass sanctions.
“With its economy in freefall and inflation in the triple digits, the regime is desperate for cash,” Secretary of the Treasury Scott Bessent said in a statement.
“The United States will not allow Iran to hold global commerce hostage or use international shipping to finance the IRGC’s terrorism, aggression, and repression.”
The OFAC statement added that two firms — the Persian Gulf Marine Insurance Company (PGMIC) and HormuzSafe Marine Services Authority (“Hormuz Safe”) — accused of running an IRGC-backed scheme forcing commercial vessels to buy mandatory “insurance” to transit the Strait of Hormuz.
Bloomberg first reported in May that Iran had started a Bitcoin-backed insurance service for Iranian shipping companies.
The U.S. earlier this month announced that it had frozen crypto linked to the Iranian regime, mostly in the form of the Tether stablecoin.
Stablecoins like Tether’s USDT can be frozen by the company that issues the asset but Bitcoin, being decentralized and having no single issuer, cannot.
Experts have warned that a recession could follow due to the war between the U.S. and Iran due to high oil prices if the Strait of Hormuz remains closed.