According to the Treasury, the exchange facilitated the movement of hundreds of millions of dollars in Bitcoin to the Islamic Revolutionary Guard Corps (IRGC).
Authorities also allege the platform processed payments for "safe passage" fees collected from tankers in the Strait of Hormuz by the Hormuz Safe Marine Services Authority.
These sanctions matter because they target the digital asset infrastructure Iran uses to bypass traditional financial systems and fund regime activities.
By designating BitBank, the U.S.
government has frozen the exchange’s property within U.S.
jurisdiction and implemented secondary sanctions.
This mechanism threatens to cut off any foreign financial institution or exchange from the U.S.
financial system if they continue to process transactions for the sanctioned entities, regardless of whether the transactions involve U.S.
citizens.
While the action aims to disrupt the flow of funds from shipping tolls and IRGC operations, the Treasury notably did not include specific cryptocurrency wallet addresses in this designation.
This omission may complicate enforcement for compliance teams that typically rely on these digital strings to update automated screening software.
The sanctions follow claims from shipping lawyers that the underlying toll system—which charges vessels between $1 million and $2 million for transit—violates international maritime transit rights.