US freezes $131M in Iran-linked crypto as Middle East hostilities escalate

The US Treasury froze more than $130 million in cryptocurrency held in wallets linked to Iran's Central Bank, Treasury Secretary Scott Bessent said Tuesday, as Washington intensified financial pressure alongside renewed military strikes in the Middle East.

"US Treasury is committed to disrupting and degrading Iran's illicit financial activities, including its abuse of digital assets," Bessent said in a post on X. "We will continue to aggressively follow the money and deny the Iranian regime access to the proceeds of its illicit revenue schemes."

Blockchain investigator Specter identified the action after on-chain data showed Tether froze four Tron wallets holding $131 million worth of USDt. The Treasury's Office of Foreign Assets Control sanctioned the wallets under Executive Order 13902, which targets Iran's core economic sectors. The move follows a $344 million freeze in April, when Tether blocked two wallets at US authorities' request, and brings total known US seizures of Iranian crypto assets to roughly $1 billion since Operation Economic Fury launched in March 2025.

The freeze coincided with a broader sanctions package naming more than 50 individuals, entities and vessels tied to Mohammad Hossein Shamkhani's oil export network, which Treasury has now sanctioned over 200 people and entities under. US Central Command resumed a naval blockade of Iranian ports Tuesday, deploying more than 20 warships and hundreds of aircraft, while Iran's military claimed drone strikes against US facilities at Jordan's Al Azraq Air Base.

Operation Economic Fury widens

The Treasury action is the latest under Operation Economic Fury, a campaign Bessent has described as disrupting "the foreign procurement networks that support the Iranian military's efforts to acquire weapons." In a June statement, he said Treasury had "frozen the Iranian regime's assets, severely disrupted its economy, and dismantled the Iranian war machine."

The sanctions specifically target the network of Mohammad Hossein Shamkhani, whom Bessent described as operating "one of the regime's most profitable engines, built on deception." OFAC has now sanctioned more than 200 individuals and entities connected to his operations, which facilitate Iranian oil exports that bypass international restrictions.

Stablecoin infrastructure as a sanctions tool

The freeze shows the growing role of stablecoin issuers in US sanctions enforcement. Tether, the largest stablecoin issuer by market cap with roughly $110 billion in circulation, has increasingly complied with OFAC requests to freeze wallets tied to sanctioned entities. The April freeze of $344 million was among the largest single USDT seizures on record.

The action also highlights Tron's role as the preferred blockchain for Iran-linked transfers, given its low fees and high throughput. Four Tron-based wallets were targeted in Tuesday's freeze, consistent with patterns identified by blockchain analytics firms tracking Iranian financial flows.

Market pricing suggests the freeze may reduce the likelihood of a US-Iran nuclear deal by August 2026, as tensions remain elevated. Observers will monitor statements from Iranian Supreme Leader Ayatollah Ali Khamenei and President Donald Trump for signals on the trajectory of negotiations.

This article is for informational purposes only and does not constitute investment advice.