US prosecutors allege two China-based firms used Binance accounts to move proceeds from sanctioned Iranian oil sales as part of a wider $1.5 billion crypto laundering network
The US Department of Justice said that two China-based companies used accounts on cryptocurrency exchange Binance to launder proceeds from the black-market sale of Iranian crude oil and petroleum products.
In a civil forfeiture complaint filed on Tuesday, the US Attorney’s Office for the Southern District of New York said it was seeking the seizure of about $61 million in cryptocurrency allegedly linked to the proceeds of sanctioned Iranian oil sales.
US prosecutors also said that a wider network of cryptocurrency actors had helped move more than $1.5 billion in proceeds from illicit Iranian oil sales. The funds were allegedly routed to the Iranian government, its agents and entities linked to Iran’s Islamic Revolutionary Guard Corps, or IRGC.
The DOJ said two Chinese companies, Blessed Trust and Hexa Whale, used trading accounts on Binance as part of the scheme. Both companies had presented themselves to financial and cryptocurrency service providers as legitimate businesses, prosecutors said.
Blessed Trust described itself as a wealth management or digital asset custody company but allegedly received and transferred money generated from Iranian oil sales. It also provided services to convert conventional currencies into cryptocurrency, including through US-based cryptocurrency issuers, according to the complaint. Hexa Whale presented itself as a commodities brokerage firm but allegedly carried out similar transactions while working with Blessed Trust and related entities. The DOJ said clients of the two companies included businesses operating in China’s petroleum and petroleum products sector.
More from BusinessThe complaint also identified a network of interconnected cryptocurrency addresses, referred to as “Entity A”. According to prosecutors, those addresses received and distributed more than $1.5 billion generated from the alleged sale of Iranian oil.
US authorities said the money was transferred to businesses linked to the IRGC, cryptocurrency addresses associated with the group and an Iran-based cryptocurrency exchange. Blessed Trust, Hexa Whale and individuals associated with them allegedly helped move the funds through a series of transactions and cryptocurrency addresses designed to conceal their source and ownership.
The DOJ said the companies also used the US financial system to send or receive tens of millions of dollars as part of the alleged scheme.
“Today’s complaint demonstrates the FBI’s ability to follow the money,” FBI New York Field Office Assistant Director in Charge James C. Barnacle Jr said in the statement. He said authorities would continue efforts to cut off funds generated through black-market crude oil sales.
Deputy US Attorney Sean S. Buckley said Iran relies on black-market oil sales to finance its military and other activities. He alleged that cryptocurrency actors in China and elsewhere helped launder more than $1.5 billion in illicit oil proceeds.
