Speaking at the 2026 Reagan National Economic Forum in Simi Valley, California, Treasury Secretary Scott Bessent told Fox Business host Larry Kudlow that the United States has seized roughly $1 billion worth of cryptocurrency from entities linked to Iran's military since conflict broke out in February. 

 

"We just outright grabbed the wallets," Bessent said. "Some of them may be typing in right now, and they might not have realized that their wallet had been grabbed."

 

Operation Economic Fury

The seizures Bessent referenced didn't happen overnight. They are the product of a campaign called Operation Economic Fury, a Treasury-led financial pressure initiative that kicked off around March 2025 under the Trump administration's direction. The goal, broadly, has been to cut off Iran's ability to move money internationally by targeting its revenue streams, weapons funding infrastructure, and sanctions evasion networks.

 

Before this campaign intensified, Iran had reportedly been routing $400 million to $500 million per month through crypto, primarily USDT on the Tron blockchain, to fund oil sales and Islamic Revolutionary Guard Corps operations.  It's a shadow banking pipeline built on a stablecoin that, for various reasons, became the preferred dollar substitute in sanctioned economies around the world.

 

The Treasury's Office of Foreign Assets Control has since sanctioned more than 1,000 Iran-linked entities and wallet addresses. It has also gotten some notable help from the private sector.

 

Tether as a Sanctions Tool

On April 24, 2026, Tether froze $344 million in USDT across two Tron blockchain addresses tied to Iran's IRGC and the Central Bank of Iran. One wallet held approximately $213 million; the other, $131 million. Blockchain analytics firm Chainalysis had flagged the addresses based on on-chain patterns consistent with known Iranian military wallets, and the freeze was coordinated directly with U.S. law enforcement and updated OFAC designations published the same day.

 

USDT circulates heavily on Tron precisely because it became a preferred rail for cross-border transfers in regions where traditional dollar-based banking is unavailable or restricted. By working with Tether to freeze those wallets, the Treasury effectively turned the world's largest stablecoin into a live sanctions enforcement mechanism. That's a significant shift in how financial pressure campaigns work in the digital asset era.

 

The implications go beyond Iran. Tether's cooperation confirms, in practice, that USDT is not a neutral financial instrument. It is subject to the same policy levers as the dollar-based correspondent banking system it was often pitched as an alternative to.

 

Bitcoin, Hormuz, and the Limits of "Untraceable" Crypto

The IRGC's crypto ambitions have not been limited to stablecoins. In April, the Financial Times reported that Iran was planning to require oil tankers passing through the Strait of Hormuz to pay transit fees in Bitcoin. An Iranian official quoted at the time said the fees "can't be traced or confiscated due to sanctions." That quote aged poorly.

 

This month, Iran's state-affiliated Fars news agency reported that the IRGC promoted a Bitcoin-settled maritime insurance platform called Hormuz Safe. The scheme is a direct response to the ongoing blockade of the waterway, through which roughly 20% of the world's oil flows. With oil revenues choked and the regime under mounting financial pressure, digital assets have become one of the few remaining channels to keep funds moving.

 

Bessent did not directly link the $1 billion in seizures to the Bitcoin toll scheme. He also did not confirm whether Bitcoin itself was among the seized assets. Those details remain unspecified. What he did confirm is that the campaign is ongoing, that the seizures are substantial, and that some of those holding the funds may still be unaware.

 

Legal Fallout and Frozen Funds

The frozen Tether tranche is already the subject of a legal battle. A group of American terrorism victims, families connected to a 1997 Hamas bombing in Jerusalem, filed a motion in Manhattan federal court in mid-May seeking to have the $344 million transferred directly to their attorneys. Their unpaid court judgments against Iran total more than $2.4 billion across multiple terrorism-related cases. The plaintiffs served restraining notices on Tether just three days after the original freeze.

 

It is a legally complex situation. Tether froze the wallets by blacklisting the addresses at the smart contract level. Whether those funds can be redirected to private plaintiffs rather than held by the government is an open question, and one that federal courts will likely spend considerable time untangling.

 

Where This Leaves Iran, and Crypto

Bessent's comments Friday came as negotiations over a potential ceasefire deal were apparently inching forward. Reports citing Axios indicated that negotiators had reached a preliminary agreement pending Trump's approval. Whether that changes the pace of seizures is unclear.

 

What is clear is that Iran's crypto holdings are larger than the seized amount. Estimates put total Iranian digital asset holdings at roughly $7.7 billion, with about half attributed to the IRGC. The billion seized so far is meaningful pressure but not a knockout blow.

 

For the broader crypto market, the episode lands as a reminder that the "permissionless" framing of digital assets has always had limits. When the asset is a dollar-pegged stablecoin issued by a centralized company, and that company cooperates with the U.S. Treasury, the network rails may be decentralized but the kill switch is not. That reality is going to shape how governments, firms, and bad actors all think about crypto infrastructure for years to come.

 

The U.S. Department of the Treasury, specifically the Office of Foreign Assets Control (OFAC), has frozen $344 million in USDT allegedly linked to Iran.

 

In a Friday post on X, U.S. Treasury Secretary Scott Bessent announced the crypto seizure. The move, according to Bessent, is part of the U.S. effort to systematically degrade Tehran’s ability to generate, move, and repatriate funds.

 

 

“We will follow the money that Tehran is desperately attempting to move outside of the country and target all financial lifelines tied to the regime,” Bessent wrote.

 

While the announcement from Bessent confirmed the freeze and the imposition of sanctions on the owners of the wallets involved, the technical action of the freeze itself was carried out by stablecoin issuer Tether. The stablecoin issuer had earlier stated that it was supporting OFAC and law enforcement agencies in freezing the $344 million linked to the Islamic Revolutionary Guard Corps (IRGC) and the Hezbollah militant group.

 

Following the announcement, Tether blacklisted two specific wallet addresses on the Tron blockchain, holding $213 million and $131 million in USDT respectively. This move by the U.S. Department of the Treasury follows a similar action in February, when OFAC sanctioned more than 30 individuals and entities allegedly linked to Iran’s oil shipping network.

 

Tether Expands Blockchain Development Efforts

Tether has consistently pushed forward with innovative blockchain developments. Just this month, it launched tether.wallet, its self custodial wallet that brings Tether’s global financial infrastructure within reach of those who have been left unbanked by the traditional financial system.

 

In an effort to enhance the utility of its stablecoins, Tether last month invested 5.2 million dollars into Ark Labs, supporting the building of Arkade, an infrastructure layer that brings programmable, instant transactions directly to the Bitcoin network. Through the Arkade network being built by Arkade Labs, we might see the introduction of stablecoins, including USDT, into Bitcoin.

 

Tether, for the first time, expanded USAT, its US regulated stablecoin, to the Celo blockchain. Since Celo is an Ethereum Layer 2 network optimized for payments, the expansion of USAT to Celo enabled the integration of USAT into Opera MiniPay and Google Cloud infrastructure.

 

 

 

There was a surge in crypto withdrawals minutes after the U.S. and Israel launched targeted military airstrikes in Tehran, Iran’s capital, last Saturday.

 

In a recent post, London-based blockchain analytics company Elliptic gave a report on the aftermath of the airstrikes in Iran. Elliptic reported a significant increase in crypto withdrawals from Nobitex, Iran's largest cryptocurrency exchange.

 

According to the firm, outgoing transaction volume from Nobitex spiked by over 700% within minutes after the first airstrike hit Tehran on Saturday, with crypto outflows reaching nearly $3 million in a single hour that same day.

 

Image credit: elliptic.co

 

 

Further tracing these funds, Elliptic reported that most of the withdrawals were sent to foreign crypto exchanges, potentially indicating intense capital flight amid uncertainty in the region.

 

"Nobitex allows rials to be converted to cryptoassets, which can then be withdrawn to any external wallet…initial tracing of recent outflows from Nobitex suggests that the funds are being sent to overseas cryptoasset exchanges," Elliptic stated.

 

Although this outflow persisted for most of that day, it fell sharply afterward, an event attributed to the nation's widespread internet outage. Yes, there was a 99% decline in internet connectivity in the country.

 

However, contrary to the "capital flight" situation being reported by Elliptic, blockchain intelligence firm TRM Labs seems to hold a different view and cautions against drawing a "capital flight" conclusion.

 

"It appears that the country's crypto ecosystem is not showing signs of acceleration or capital flight, but instead is experiencing a downturn in both transactions and volume as the regime enforces strict internet blackouts," TRM Labs said.

 

 

The State of Crypto in Iran

Despite ongoing unrest, the Iranian cryptocurrency economy appears to be among the largest crypto markets in the world. In 2025, over $10 billion in volume was processed, with Nobitex processing over $5 billion.

 

Iranian crypto exchanges have had to deal with massive crypto outflows, the largest of which occurred on January 9 of this year, after the nationwide demonstrations in the country.

Image credit: elliptic.co

 

To adapt to changing events, cryptocurrency exchanges in the country have had to make operational adjustments and move to risk-containment modes.

 

Wallex, a domestic crypto exchange, suspended crypto withdrawals until further notice, citing infrastructure instability. Nobitex, Aban Tether, and Ramzinex, which are all Iranian-based cryptocurrency exchanges, have also had to suspend deposits and withdrawals.

 

However, despite these challenges, cryptocurrencies and digital assets have come to the rescue of many who have had to cope with the several economic sanctions plaguing the country.