US Sanctions Bitcoin Exchange for Handling Iran's Hormuz Transit Fees

The U.S. Treasury's Office of Foreign Asset Control has identified and sanctioned an Iranian bitcoin exchange linked to the "Hormuz Safe Marine Services Authority," a front company that enables the Islamic Revolutionary Guard Corps' fee-for-transit scheme for the Strait of Hormuz. 

In March, just weeks after the U.S.-Israeli strikes began, Iranian forces began an informal practice of charging safe-passage fees for the Strait of Hormuz at a rumored rate of up to $2 million per transit. This was later formalized as an "insurance" fee payment, handled by "Hormuz Safe" and the similar "Persian Gulf Marine Insurance Company." 

Both of these organizations were sanctioned by OFAC in July for facilitating the IRGC's finances. "Hormuz Safe generates revenue on behalf of the IRGC in an attempt to give the regime tighter control over shipping activity," warned the Treasury at the time. 

HormuzSafe advertises itself as a modern "digital insurance" company, purporting to offer legitimate services for transits through the strait - for example, salvage towing in the event of an emergency. It offers owners the opportunity to "sail through with complete confidence" with a "99.9 percent safe transit rate." It accepted payments in Bitcoin, various dollar-linked stablecoins, credit cards and wire transfers.