Iran Tried to Turn Bitcoin Into a Sanctions Workaround. It Just Got Shut Down. | Memionic
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Opinion · Sanctions & Crypto

Iran Tried to Turn Bitcoin Into a Sanctions Workaround. It Just Got Shut Down.

BitBank promised Tehran a bitcoin-powered way around the sanctions wall. The math behind it was shaky before Washington ever got involved.

Memionic Staff · Opinion

What happened

This week the U.S. Treasury dropped the hammer on an Iranian crypto exchange called BitBank, along with the man behind it, financier Babak Zanjani, his software developer, and three of his associates. The accusation is straightforward: BitBank allegedly moved hundreds of millions of dollars' worth of bitcoin to Iran's Islamic Revolutionary Guard Corps between June and July, funneling in payments from a newly created maritime scheme called the Hormuz Safe Marine Services Authority — essentially an insurance racket charging ships for safe passage through the Strait of Hormuz, settled entirely in BTC.

The stated ambition behind Hormuz Safe wasn't modest, either. Reports pegged its target at north of $10 billion in revenue. That's the number that makes this whole story worth a second look.

Who's actually on the list

  • BitBank — the exchange itself, now designated by OFAC
  • Babak Zanjani — an already-sanctioned financier once sentenced to death in Iran for embezzlement, before that sentence was quietly commuted
  • Pishtaz Simorgh Electronic Trade Company — the outfit that built BitBank's software
  • Three named associates tied to Zanjani's wider network
~3–4% Rough share of Hormuz Safe's $10B revenue goal that "hundreds of millions" in BTC would actually represent

My take: the math never worked

Here's the part that stands out to me more than the sanctions themselves. Treasury's own language — "hundreds of millions" — moved over roughly two months, June through July. Take a reasonable midpoint of that range, say $300 million, run it out over a full year at that pace, and you land somewhere around $1.8 billion annually. Against a stated $10 billion target, that's not a rounding error, but it's not close to the goal either — it would take the better part of six years to get there at that rate, assuming nothing ever slowed it down. Nothing ever slows sanctioned Iranian financial schemes down, of course, except the thing that just happened: Treasury showing up and switching off the exchange.

Put another way, with bitcoin trading somewhere in the neighborhood of $80,000 this month, $300 million works out to roughly 3,750 BTC. That's real money by any normal measure. It's also a fraction of what a genuinely sanctions-proof, multibillion-dollar shipping-insurance racket would need to move to hit its own numbers. The gap between the ambition ("$10 billion") and the actual flow ("hundreds of millions" over two months) tells you this operation was still in its early innings — which is exactly when it's cheapest and easiest for a government to kill it.

Why crypto keeps getting used this way

None of this is new, and that's the more interesting story. Zanjani's network has already been hit with sanctions this year, more than once, and each time a piece gets cut off, a new entity seems to appear to replace it. That's the appeal of crypto to a sanctioned regime in the first place: spinning up a new exchange or wallet is trivial compared to rebuilding access to the traditional banking system once you've been cut off from SWIFT. Treasury Secretary Scott Bessent put it plainly in the announcement, saying financing the Iranian regime through crypto is "not beyond OFAC's reach." Judging by how quickly this particular scheme got flagged — within months of launch, according to Iranian media reports of Hormuz Safe first surfacing back in May — that's more than just a talking point this time.

The uncomfortable truth for the crypto industry is that stories like this are exactly what fuels the push for tighter exchange-level compliance everywhere, not just in Iran. Every sanctioned wallet is also a data point regulators use to argue that decentralized rails need more centralized oversight, not less.

my last line on that topic

BitBank wasn't a sophisticated financial engineering feat — it was a bet that bitcoin's speed would outrun Treasury's attention span. That bet lost. The bigger question is how many more versions of this same playbook are already being built to replace it, and whether the next one keeps its numbers quiet enough to last longer than three months.

Think this is the last we'll hear of Iran's crypto sanctions-evasion attempts? Drop your take in the comments — and follow Memionic for the next update when it inevitably surfaces again.

This article reflects Memionic's own analysis and opinion. Figures are illustrative estimates based on publicly reported ranges, not precise or audited totals. This is not financial advice.