US DOJ Seeks $61M USDT Forfeiture Over Iran Oil Sanctions

The US Department of Justice has filed a lawsuit seeking forfeiture of more than $61 million in USDT, allegedly proceeds from the sale of sanctioned Iranian oil. Prosecutors claim the funds were meant to finance Iran's government and military structures, including the Islamic Revolutionary Guard Corps. The complaint was filed by the US Attorney's Office for the Southern District of New York on Monday, and it is far from the first such case against crypto networks tied to Tehran.

The Southern District of New York Complaint

This is a civil forfeiture case: prosecutors are going after the funds themselves rather than a specific person, so no criminal conviction is needed to seize the tokens. According to the complaint, Blessed Trust and Hexa Whale, both incorporated in Hong Kong, used Binance accounts to move proceeds from oil sold to buyers in China.

A network of related wallets allegedly received and distributed more than $1.5 billion, prosecutors say. Part of those funds allegedly went to IRGC-linked money-transfer businesses, cryptocurrency addresses and an Iranian exchange. The Revolutionary Guard and its Quds Force branch have featured on US sanctions lists for years as the structures behind Tehran's operations abroad, including funding for allied armed groups across the region.

Networks like this tend to follow a familiar pattern. Buyers in China pay a discounted price for the oil through a chain of trading intermediaries, then quickly convert the proceeds into crypto to break the visible link between the oil and the ultimate recipient of the money. That is why untangling these cases usually takes investigators far longer than proving the oil sale itself took place.

US prosecutors have increasingly turned to this approach against oil-sanctions evasion schemes in recent years. Blockchain transparency lets investigators trace a chain of transactions even years after the fact, and wallets like the ones named in this case leave a digital trail that is hard to erase completely.

Binance's Position and Tether's Role

A Binance spokesperson told Cointelegraph that the exchange does not allow transactions with sanctioned individuals and continues cooperating with law enforcement through investigations, restrictions or account freezes where appropriate. The case was not filed against the exchange itself, and investigators do not allege wrongdoing by Binance. Cointelegraph also reached out to Tether for comment but had not received a response by publication time.

Tether froze 61.19 million USDT across 10 addresses on the Tron network last year after receiving a request from investigators. The stablecoin issuer has increasingly carried out this kind of freeze at the request of law enforcement in various countries in recent years, and this case is no exception. The full text of the claims is laid out in the press release from the US Attorney's Office for the Southern District of New York dated September 14, 2026.

How the Tokens Were Frozen

USDT cannot be seized as simply as cash from a bank account. The seizure warrant lets the FBI take custody of the funds through a separate procedure at the level of the token's own smart contract, rather than a standard transfer from one wallet to another.

• Tether destroys the frozen tokens at the listed addresses.
• The company issues new USDT of equivalent value.
• The new tokens are transferred to an FBI-controlled hardware wallet.
• The US only gains permanent ownership once a court rules in the government's favor.

The DOJ stresses that the allegations in the civil complaint remain unproven. Permanent ownership passes to the government only if a court enters a forfeiture judgment in its favor. Anyone claiming ownership of the assets can contest the case within a court-set window, and the tokens stay seized in the FBI wallet until then. US law enforcement has used this same destroy-and-reissue mechanism in other crypto forfeiture cases in recent years, so the process has become fairly routine for Tether by now.

Pressure on Iran Keeps Mounting

The lawsuit comes a month after the US Treasury expanded its Iran sanctions framework to cover digital assets. The updated rules allow authorities to go after foreign individuals and companies that work in or support that sector, even without a direct formal link to Iran itself. Treasury had earlier accused UAE-based broker Ivan Obukhov of processing more than $100 million in crypto payments since 2023 on behalf of the Quds Force, the branch responsible for Tehran's foreign military and financial operations. The two cases involve different players but share the same goal: cutting off crypto channels that fund the Iranian regime.

The filing lands in the middle of the war between the US, Israel and Iran. The conflict, which began in February, keeps disrupting oil shipments across the Middle East. Vessel traffic through the Strait of Hormuz has dropped, and Saudi Arabia's East-West pipeline went offline after Friday attacks that Riyadh blamed on Iran-backed fighters. Houthi forces launched their own missile and drone strikes on Saudi infrastructure on Monday, while Tehran has not officially acknowledged any role.

Oil prices climbed in response. Brent crude traded at about $107.59 a barrel, up 1.81%, while WTI held near $103.35, up 1.93%. The fate of the $61.19 million in USDT now rests with the courts, and the DOJ has signaled that similar cases against crypto assets tied to sanctions evasion will keep coming.