U.S. Attorneys for the Southern District of New York have filed a civil forfeiture complaint seeking to seize about $61 million in cryptocurrency as the proceeds of black-market sales of sanctioned Iranian crude oil and petroleum products, intended to finance the government of Iran and Iranian military components, including Iran’s Islamic Revolutionary Guard Corps, a designated terrorist organization.
The complaint claims that two Chinese companies, Blessed Trust and Hexa Whale, used trading accounts at the UAE-based cryptocurrency exchange Binance to launder the proceeds of black-market sales of Iranian oil, funneling the illicit funds to the Government of Iran, its agents, and/or its proxies, where they were used to finance terrorist and other activities of the Iranian government.
Though Blessed Trust represents itself to financial services and cryptocurrency services providers as a wealth management or virtual asset custodial services firm, in fact it received and transferred the proceeds of sales of Iranian crude oil and petroleum products and provided “on-ramp” services to convert fiat currency into cryptocurrency, including through the use of U.S.-based cryptocurrency issuers. Hexa Whale similarly presents itself as a commodities brokering company but, in fact, provided services similar to Blessed Trust, working in concert with Blessed Trust and its affiliates. Blessed Trust and Hexa Whale’s clients include companies in China’s petroleum and petroleum products sector.
“Today’s action demonstrates our determination to deprive the Government of Iran and its terrorist proxies of the illegal money they rely on to threaten the lives and safety of the citizens of the United States and elsewhere,” said Deputy U.S. Attorney Sean S. Buckley. “The Government of Iran relies on black-market sales of sanctioned crude oil to fund its military and foster terrorism in the Middle East and around the world, along with other malign efforts to develop a nuclear program and ballistic missiles capable of delivering nuclear payloads. As alleged in the complaint filed today, the Government of Iran used a network of cryptocurrency actors in China and elsewhere to launder more than $1.5 billion in illicit oil money intended to benefit the Iranian military and the terror-designated IRGC. Today we are seizing and seeking to forfeit more than $61 million of the Government of Iran’s money, which otherwise would have promoted hostile military action and terrorist attacks against the U.S. and our allies.”
A series of interrelated unhosted cryptocurrency addresses, termed the “Entity A” addresses, have received and distributed more than approximately $1.5 billion of proceeds of the illicit sale of Iranian oil.
Entity A has funneled Iranian oil money to IRGC-related money services businesses, IRGC-related cryptocurrency addresses, and an Iranian cryptocurrency exchange. These transfers of Iranian oil proceeds were facilitated in large part by Blessed Trust, Hexa Whale, and individuals associated with those entities, through transactions and cryptocurrency addresses designed and executed to obfuscate the nature, source, and ownership of the funds involved. Blessed Trust and Hexa Whale have also used the U.S. financial system to send or receive tens of millions of dollars as part of this scheme.
“Today’s complaint demonstrates the FBI’s ability to follow the money, root out illicit schemes, and halt the stream of cryptocurrency to any government attempting to evade sanctions or committing terrorist activities,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “By cutting off funds raised by the black-market sale of crude oil, the Iranian military and terrorists are weakened. The FBI will not relent in its resolve to drain the funds from dangerous foreign actors.”
Buckley praised the outstanding work of the FBI New York Counterintelligence and Espionage Division. Buckley also thanked the Counterterrorism Section and the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division and the Money Laundering, Narcotics, and Forfeiture Section of the Department of Justice’s Criminal Division for their assistance and support for the investigation and today’s forfeiture action.
This case is being handled by the Office’s Illicit Finance and Money Laundering Unit and National Security and International Narcotics Unit. Assistant U.S. Attorneys Christopher Brumwell, Jane Chong, David Markewitz, and Juliana N. Murray are in charge of the prosecution.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards a judgment in favor of the United States.
