In an escalation of efforts to curb Iran’s illicit financial activities, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions on September 16, 2025, targeting a sophisticated shadow banking network.
This operation, valued at over $600 million in cryptocurrency inflows, allegedly facilitated the evasion of U.S. sanctions by channeling funds to Iran’s military and defense sectors, including the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF) and the Ministry of Defense.
The move underscores the growing intersection of cryptocurrency and international sanctions evasion, as detailed in a Chainalysis report.
At the core of the network are two key Iranian financial facilitators: Alireza Derakhshan and Arash Estaki Alivand.
These individuals, operating through a web of front companies in Hong Kong and the United Arab Emirates (UAE), coordinated cryptocurrency transactions that supported prohibited entities.
Alivand, in particular, maintained ties to previously sanctioned groups, such as the Al-Qatirji Company, which has been implicated in Iranian oil sales, and Hezbollah-linked money changer Tawfiq Muhammad Sa’id al-Law.
These connections provided the IRGC-QF with access to digital wallets for proceeds from commodity sales, including oil.
The network’s scale is seemingly significant.
Between 2023 and 2025, it enabled over $100 million in cryptocurrency purchases directly tied to Iranian oil revenues.
Overall inflows to the designated addresses exceed $600 million, illustrating how shadow banking has evolved into a multi-jurisdictional threat.
Chainalysis’s analysis, using its Reactor tool, revealed intricate connections: the network interacted with wallets identified by Israel’s National Bureau for Counter Terror Financing (NBCTF) as IRGC-QF assets, as well as mainstream Iranian crypto exchanges.
It also linked to Houthi financier Sa’id al-Jamal, expanding the geopolitical reach of the evasion scheme.
Technically, the operation relied on blockchain’s pseudonymity to obscure fund flows.
OFAC designated specific addresses across Ethereum (ETH) and Tron (TRX) networks.
For Alivand, these include certain ETH addresses TRX addresses.
Derakhshan’s addresses were similarly flagged.
These wallets served as conduits for laundering oil sale proceeds into crypto, bypassing traditional banking scrutiny.
Front companies in Hong Kong and the UAE acted as intermediaries, blending legitimate trade with illicit transfers.
The sanctions impose severe restrictions: U.S. persons are prohibited from dealing with these entities, and any assets under U.S. jurisdiction are frozen.
This action builds on prior designations, aiming to dismantle the broader ecosystem supporting Iran‘s sanctioned activities.
As OFAC stated, the network was “coordinating cryptocurrency transactions that benefit the Islamic Revolutionary Guard Corps Qods Force (IRGC-QF) and Iran’s Ministry of Defense.”
This case highlights the dual-edged nature of cryptocurrency in global finance. While digital assets offer speed and accessibility, their transparency—via on-chain analytics—has become a powerful tool for enforcers.
Chainalysis notes,
“The complexity of this network, spanning multiple jurisdictions and utilizing both traditional front companies and cryptocurrency, highlights the challenges in detecting and disrupting modern sanctions evasion schemes. However, it also shows how the transparency of the blockchain presents unprecedented opportunities to identify and disrupt complex networks facilitating sanctions evasion in the hundreds of millions of dollars.”
The implications extend beyond Iran.
As evasion tactics grow more sophisticated, regulators worldwide may intensify crypto oversight.
Chainalysis has reportedly updated its screening tools to incorporate these designations, urging businesses to enhance compliance.
For the crypto industry, this serves as a reminder: tech advancements must align with robust anti-money laundering measures to prevent exploitation by state actors.
In an era of geopolitical tensions, OFAC‘s strike demonstrates resolve against shadow finance.
Yet, with Iran‘s oil exports persisting despite sanctions, ongoing vigilance is essential.