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OFAC Expands Its Sanctions Framework for Iran’s Digital Asset Sector

On 17 September 2026, OFAC designated the Iranian platform BitBank, its developer and three members of Babak Zanjani’s network under U.S. sanctions. Beyond these new listings, that set of measures illustrates the mobilisation of the U.S. government against the infrastructures enabling the Iranian regime to use digital assets to dodge sanctions.

By Justin Nuta21 September 20267 min

Scope of the New Measure

On 17 September 2026, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) added two entities and three individuals to the Specially Designated Nationals and Blocked Persons List (“SDN List”) for their alleged involvement, according to the U.S. authorities, in Iran’s digital asset-based sanctions evasion infrastructure.

OFAC targeted BitBank, an Iranian digital asset exchange, its developer, Pishtaz Simorgh, and three executives associated with Babak Zanjani’s network. All were added to the SDN List under the Iran sanctions programme and are exposed to secondary sanctions.

This action forms part of Operation Economic Outcast, a U.S. campaign intended to identify and disrupt the financial flows enabling the Iranian regime to access the international financial system, commercialise its resources and finance its activities despite sanctions. Announced on 24 August 2026, the campaign notably targets the networks, facilitators and financial channels used by Iran to export petroleum, evade sanctions and finance terrorist activities.

According to the U.S. Treasury, BitBank is controlled by Babak Zanjani, an Iranian financier designated by OFAC in January 2026. Between June and July 2026, Zanjani allegedly used the platform to transfer hundreds of millions of dollars’ worth of Bitcoin to the Islamic Revolutionary Guard Corps. Pishtaz Simorgh, the company that develops BitBank’s software, is described as a subsidiary of Dot One Value Creation Group, the holding company of the Zanjani-controlled conglomerate, which had previously been designated by OFAC.

The Treasury also states that Hormuz Safe Marine Services Authority, an Iranian entity designated in July 2026, used BitBank to transfer to the regime payments received in connection with its maritime activities. OFAC had described Hormuz Safe as an Iranian digital maritime services company accepting payments in Bitcoin and other digital assets. The 17 September action therefore connects, within a single financial circuit, digital assets, Babak Zanjani’s network and the revenue collection mechanisms associated with the Strait of Hormuz.

The U.S. Department of State further emphasises that international digital asset platforms can provide the Iranian regime, including the Central Bank of Iran, with a gateway to the international financial system. It calls on governments and the private sector, particularly businesses operating in the digital asset sector, to exercise vigilance to ensure that their platforms are not used by the Iranian regime or its facilitators.

Legal Basis for the Designations

The five designations were made pursuant to Executive Order 13902 of 10 January 2020, which authorises the U.S. Treasury to impose blocking measures on persons operating in certain sectors of the Iranian economy.

By way of reminder, Executive Order 13902 enables OFAC to place under U.S. sanctions any person operating in a designated sector of the Iranian economy. Although the text directly identifies certain sectors, it also authorises the Secretary of the Treasury, in consultation with the Secretary of State, to expand that list at a later stage. The framework then enables the authorities to reach individuals and entities connected with the persons so blocked: persons providing financial, material or technological support to them may also be designated, as may entities they own or control and persons acting directly or indirectly on their behalf.

An OFAC determination that entered into effect on 24 August 2026 specifically extended the application of section 1(a)(i) to Iran’s aviation, digital asset, gold, shipping and technology sectors. BitBank and Pishtaz Simorgh were therefore designated for operating in Iran’s digital asset sector.

The three individuals were designated because of their functional links with persons that were already blocked:

In addition, section 2 of Executive Order 13902 enables the U.S. Treasury to prohibit or impose strict conditions on the opening or maintenance in the United States of correspondent or payable-through accounts by a foreign financial institution that has knowingly conducted or facilitated certain significant financial transactions connected with the targeted sectors or persons.

A Named Designation Supplementing a Broader Blocking Regime

BitBank’s inclusion on the SDN List does not mean that the platform was not already blocked as regards U.S. persons.

In FAQ 1250, published on 1 May 2026, OFAC considers that an Iranian digital asset exchange meets the regulatory definition of an “Iranian financial institution” under the Iranian Transactions and Sanctions Regulations. Property and interests in property of such a platform that fall within U.S. jurisdiction are therefore blocked pursuant to Executive Order 13599, even where the platform is not individually included on the SDN List.

The 17 September action nevertheless has several significant effects. First, it formally identifies BitBank and its principal identifiers in the databases used for sanctions screening. Second, it makes explicit both the reliance on Executive Order 13902 and the exposure to secondary sanctions. Finally, it expressly links the platform to its developer, several members of the Zanjani network, Dot One Value Creation Group and the alleged transfers made for the benefit of the Islamic Revolutionary Guard Corps.

The legal significance of the action therefore lies less in establishing the principle that an Iranian platform may be blocked than in the precise identification of its network, technological infrastructure and the persons acting on its behalf.

The designation also forms part of a broader sequence of measures. In January 2026, OFAC had designated Babak Zanjani and the Zedcex and Zedxion platforms, certain addresses of which had, according to the Treasury, processed funds connected with wallets linked to the Islamic Revolutionary Guard Corps. In July, OFAC expanded its action to Dot One Value Creation Group and several companies supporting the network’s financial, technological, logistical and digital activities.

The 17 September action is therefore not an isolated designation. It progressively completes a mapping of the Zanjani network that now covers digital asset exchanges, technology development companies, holding companies, maritime services, executives and individual facilitators.

Scope of Application and Operational Implications

The designation of the above-mentioned persons and entities first produces mandatory effects for “U.S. persons”. This concept covers U.S. citizens and permanent residents, wherever they are located, persons present within the territory of the United States, and entities organised under U.S. law, including their foreign branches.

Such persons must block and report to OFAC any property and interests in property of the designated persons that are located in the United States or come within their possession or control. Unless exempt or authorised, they may not conduct any transaction involving blocked persons or their property.

The so-called 50 Percent Rule also applies. An entity that is owned, directly or indirectly, 50 percent or more, individually or in the aggregate, by one or more blocked persons is itself considered blocked, even if it does not appear separately on the SDN List.

A non-U.S. person, however, is not subject to a universal obligation to apply the OFAC framework solely because BitBank has been added to the SDN List. That person may nevertheless be directly exposed where a transaction has a connection with the United States, notably through the involvement of a U.S. person or U.S. infrastructure, or where that person causes a U.S. person to violate sanctions.

Even without such a connection, a non-U.S. operator may be exposed to secondary sanctions if it provides significant support to a designated platform. A foreign financial institution that has knowingly conducted or facilitated a significant transaction for BitBank could, in particular, face restrictions on its access to correspondent or payable-through accounts in the United States.

Financial institutions and digital asset service providers with relevant exposure should therefore calibrate their due diligence to the risk involved. They should identify any points of connection with the United States, update their screening tools with the new names and aliases, review relationships and transactions associated with Babak Zanjani’s network and examine ownership structures in light of the 50 Percent Rule. Where a transaction does not fall directly within U.S. jurisdiction, the analysis should distinguish the risk of a primary sanctions violation from the risk of secondary sanctions.

The action also calls for vigilance extending beyond name-based screening of platforms. The designation of Pishtaz Simorgh demonstrates that OFAC may target developers and providers of technological infrastructure that participate in a sanctions evasion arrangement. In the digital asset sector, the analysis must also extend to wallets, blockchain flows and technical intermediaries connected with blocked persons.

The BitBank designation therefore illustrates OFAC’s current strategy: targeting the entire architecture enabling funds to circulate, from the platform and its developer to the executives, holding companies and economic services that use it.