The United States (U.S.) Treasury hints that it will impose fresh sanctions on Iranian banks this week, with Treasury Secretary Scott Bessent confirming that weekly waves of restrictions are planned to target institutions linked to the Islamic Revolutionary Guard Corps (IRGC).
Treasury’s measures aim to cut Iran off from the dollar-based financial system and intensify economic pressure amid geopolitical tensions.
Roll-Out of New Sanctions
Speaking at the G20 finance ministers’ summit in Asheville, North Carolina, Bessent announced that the U.S. will sanction at least one Iranian bank this week and another the following week.
The Treasury is also targeting airline leasing companies, maritime networks, and digital asset channels suspected of facilitating IRGC transactions.
Weekly waves of restrictions are expected, targeting not only banks but also airline leasing firms, maritime networks, and digital asset channels.
A recent case involving a Dubai branch of an Egyptian bank allegedly routing $1.8 billion to Tehran depicts the scale of illicit flows. These sanctions aim to cut Iran off from the dollar-based financial system and intensify economic pressure amid escalating geopolitical tensions.
What Caused the Sanctions?
The sanctions stem from Iran’s continued use of international financial institutions to fund IRGC operations. Despite existing restrictions, Iranian entities reportedly exploited offshore accounts, property holdings, and weak regulatory environments to bypass controls.
The U.S. government argues that these practices diminish global financial integrity and directly support terrorism financing.
Furthermore, the U.S. has a long history of imposing financial sanctions on Iran, often using them as a primary tool of foreign policy.
Back in 2012, Iranian banks were cut off from the SWIFT international payments system, severely restricting their ability to transact globally. This crippled Iran’s oil revenues and isolated its financial sector.
Additionally, in 2018, the U.S. withdrawal from the Joint Comprehensive Plan of Action (JCPOA), Washington reinstated sweeping sanctions targeting Iran’s oil exports, shipping, and banking industries.
The 2019 designation of the IRGC as a foreign terrorist organization further expanded restrictions, making any financial dealings with IRGC-linked entities subject to severe penalties.
These previous sanctions have consistently aimed to limit Iran’s access to hard currency, weaken its economy, and pressure its government to alter its nuclear and regional policies.
The current wave of sanctions against banks and digital asset channels represents a continuation of this strategy, adapted to modern financial realities.
How Banks Became Vessels of Illegal Activities
Iranian banks and intermediaries are accused of violating U.S. secondary sanctions and anti-terror financing laws, including provisions under the Patriot Act.
Through enabled dollar transactions for sanctioned entities, these institutions contravene international AML/CFT standards and expose themselves to asset freezes, exclusion from SWIFT, and reputational damage.
Sanctioned banks often disguise illicit flows through third-country branches, shell companies, or offshore accounts. They channel billions into Iran’s economy by leveraging weak oversight in jurisdictions like Dubai.
These practices portray how legitimate institutions can be weaponized, turning into vessels for money laundering, sanctions evasion, and terror financing.
Crypto Used for Financial Crimes
The Treasury has expanded enforcement to cover digital assets, recognizing that cryptocurrencies can be exploited to bypass sanctions.
Exchanges and wallets are now required to comply with AML/CFT rules, including the Financial Action Task Force (FATF) travel rule, which mandates sharing sender and receiver information. This reflects a global consensus that crypto must be regulated to prevent abuse.
Crypto offers anonymity and borderless transferability, making it attractive for illicit actors. Techniques include layering transactions across multiple wallets, using mixers to obscure origins, and converting fiat into stablecoins like USDT to bypass dollar restrictions.
Terror networks and sanctioned entities exploit these features to move funds discreetly. Without strict oversight, crypto can become a parallel channel for financial crime.
Cryptocurrencies have increasingly been linked to financial crimes, including sanctions evasion.
U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash in 2022, a crypto mixer accused of laundering over $7 billion in virtual currency, including funds tied to North Korea’s Lazarus Group.
Similarly, reports from blockchain analytics firms have documented how Iranian entities used stablecoins like USDT to settle oil trades discreetly, bypassing dollar restrictions.
Another case involved Russian and Iranian networks using peer‑to‑peer exchanges to move millions in crypto across borders without detection.
All these real-life examples emphasize how digital assets, while offering legitimate financial innovation, can also be exploited by sanctioned actors to obscure transaction trails, evade regulators, and finance illicit activities.
The recorded cases underscore why regulators worldwide, including the BSP in the Philippines, have tightened oversight of Virtual Asset Service Providers to ensure transparency and compliance with anti‑money laundering standards.
What’s Next for Iran?
U.S. sanctions on Iran date back decades, targeting oil exports, banks, and trade. The current campaign represents one of the most coordinated efforts, leveraging new authorities across banking, aviation, maritime, and digital assets.
Analysts expect continued weekly sanctions, escalating to potentially cutting institutions off entirely from the dollar system.
This could further isolate Iran’s economy but also heighten risks in global energy markets. To financial institutions worldwide, the crackdown is a call for renewed emphasis on compliance, transparency, and vigilance against illicit flows.
Global and Local Governance
Internationally, the U.S. coordinates with allies in the EU, Britain, and the UAE, while holding private talks with China to prevent Iran from acquiring nuclear weapons and to secure the Strait of Hormuz.
Locally, the Bangko Sentral ng Pilipinas (BSP) enforces strict AML/CFT rules under Circular No. 944, requiring Virtual Asset Service Providers (VASPs) to register, implement KYC, and report suspicious transactions.
Moreover, the Anti-Money Laundering Council (AMLC) serves as the Philippines’ watchdog against financial crimes.
Working closely with BSP, Securities and Exchange Commission (SEC), and Insurance Commission, AMLC investigates suspicious transactions, enforces compliance, and coordinates with international counterparts.
Measures include mandatory reporting of large transactions, enhanced due diligence for politically exposed persons, and monitoring of cross-border flows. Mandated safeguards aim to prevent the Philippines from being exploited as a hub for illicit finance.
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