US Treasury sanctions Iranian firms accepting Bitcoin for Strait of Hormuz passage

The U.S. Treasury has sanctioned two Iranian firms, Persian Gulf Marine Insurance Company and HormuzSafe, for an IRGC-backed "extortion scheme" in the Strait of Hormuz. The firms forced vessels to buy insurance, with HormuzSafe accepting Bitcoin to evade sanctions. The move targets a program that could generate $10B for Iran, whose economy is in "freefall," and also sanctioned part of Iran's shadow tanker fleet.

US Sanctions on Iranian Maritime Firms

• ▪The U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two Iranian maritime firms for their role in an alleged extortion scheme
• ▪The sanctioned entities are the Persian Gulf Marine Insurance Company and HormuzSafe Marine Services Authority
• ▪The sanctions also targeted eight companies linked to Iran’s shadow fleet of tankers and identified eight vessels as blocked property

Hormuz "Insurance" Extortion Scheme

• ▪The U.S. Treasury described the operation as an "extortion scheme" where insurance protects against risks, like vessel seizure, created by Iran itself
• ▪The sanctioned firms ran a scheme requiring commercial vessels to purchase mandatory "insurance" to transit the Strait of Hormuz
• ▪The scheme was promoted on social media by Babak Morteza Zanjani, an Iranian financier previously sanctioned by the U.S.

IRGC Connections

• ▪The scheme allegedly generated revenue for the IRGC while helping Iran exert greater control over shipping through the strait
• ▪The U.S. Treasury stated the insurance scheme is backed by the Islamic Revolutionary Guard Corps (IRGC)

Cryptocurrency Use in Sanctions Evasion

• ▪The firm HormuzSafe accepts payments in Bitcoin (BTC) and other digital assets as part of an effort to bypass Western sanctions
• ▪Bitcoin is considered attractive to sanctioned actors because it lacks a centralized issuer capable of freezing funds, unlike some stablecoins

Geopolitical and Economic Context

• ▪Iranian state-linked media reported the platform could potentially generate over $10 billion in revenue for the country
• ▪The Strait of Hormuz is a strategic waterway through which about one-fifth of the global oil trade passes
• ▪U.S. Treasury Secretary Scott Bessent stated that Iran's economy is "in freefall" with "triple digits" inflation, making the regime "desperate for cash."