US expands Iran sanctions to crypto, gold and tech

On Aug. 24 the U.S. Treasury announced an expansion of sanctions on Iran under a campaign called “Operation Economic Outcast.” The action designated nearly 60 individuals, companies and vessels and opened new secondary sanctions exposure for foreign firms that keep dealing with Tehran.

Treasury Secretary Scott Bessent framed the effort as aimed at isolating Iranian financial networks and invoked a World War II analogy in describing the campaign. He warned that entities enabling Iranian money laundering risk being “removed from the US dollar system.” The Treasury issued new sectoral determinations under Executive Order 13902 to cover Iran’s digital-asset, technology, gold, aviation and shipping sectors.

The change gives the Office of Foreign Assets Control broader authority to designate people and businesses it determines operate in those sectors, even if they are not linked to a previously sanctioned Iranian counterparty. Regulators expect the expanded authority to increase compliance obligations for cryptocurrency exchanges, brokers, wallet providers, stablecoin issuers, payment processors and banks that handle Iran-related activity.

The Treasury cited growing use of cryptocurrency by Tehran to evade sanctions and to move funds tied to the Islamic Revolutionary Guard Corps and regime insiders. Among the designations, OFAC targeted UAE-based broker Ivan Obukhov and his firm Foscom FZE for processing more than $100 million in crypto payments since 2023 to facilitate oil sales for the IRGC-Quds Force. The agency also named cyber actors accused of stealing funds and targeting infrastructure, including an individual alleged to have taken control of a wallet holding more than $30,000 in bitcoin in 2023.

Treasury officials warned that foreign financial institutions that facilitate significant Iran-related transactions could face sanctions or restrictions on access to U.S. correspondent banking.

The administration indicated it will test the dollar threat with major trading partners, especially China, Iran’s largest oil customer. Bessent said Washington would give countries and companies time to change behavior and declined to immediately sanction major Chinese financial institutions, asking, “Why would I want to blow up the global financial system?” He added that “no one is above the reach of US sanctions.”

China rejected U.S. pressure, with Foreign Ministry spokesman Lin Jian stating that bilateral ties with Iran “were conducted within international law” and that Beijing would take measures to protect its interests. Iran’s parliament speaker Mohammad Bagher Ghalibaf asserted the United States lacked the economic position to further limit Tehran’s relations, while President Masoud Pezeshkian acknowledged citizens faced “many problems” as sanctions and months of conflict weighed on the economy.

Markets moved after the announcement. Bitcoin rose above $80,000, touching intraday highs near $80,887 and gaining roughly 27% in August, and gold reached a three-month high. Analysts pointed to a softer dollar, increased Treasury long-dated debt buybacks and renewed demand for alternative assets as drivers. Bitwise Chief Investment Officer Matt Hougan linked earlier freezing of Russian reserves to higher demand for gold and bitcoin and suggested aggressive use of dollar-based controls could influence investor behavior.

Officials referenced the Western response to Russia’s 2022 invasion, when roughly $280 billion in Russian sovereign assets were immobilized, as an example of how access to financial infrastructure in Western jurisdictions can be restricted. Treasury officials acknowledged enforcing sanctions through dollar clearing and correspondent banking creates leverage but could also prompt some partners to seek other options.

In the near term, the designations are likely to tighten compliance by exchanges and financial institutions handling Iran-related counterparties. Over time, the reach of repeated sanctions will depend on whether foreign governments and companies continue to prioritize access to U.S. financial networks when weighing ties with Tehran.