OFAC Warns of Sanctions Risk for Digital Asset Payments Through Strait of Hormuz

The Office of Foreign Assets Control (OFAC) has issued an alert regarding the use of digital assets for payment in relation to the passage through the Strait of Hormuz. The warning emphasizes that digital asset payments do not reduce legal risk for maritime firms, financial institutions, insurers, or counterparties.

According to reports, Iran is operating a crypto-based toll system, with Bitcoin being the primary payment method and USDT usage also reported. However, it has been noted that Tether froze over $344 million in Iranian-linked assets in late April.

The OFAC alert highlights the risks associated with digital asset payments tied to the Strait of Hormuz passage, including secondary sanctions and restricted access to the US financial system for foreign firms. The agency notes that U.S. persons are generally barred from transactions involving the Government of Iran unless exempt or authorized, and this restriction also covers dealings with Iran's Islamic Revolutionary Guard Corps (IRGC).

The OFAC alert also warns that digital asset exchanges tied to Iran are considered blocked Iranian financial institutions under US sanctions. Non-US persons engaging with these exchanges may risk sanctions for operating in or supporting the sanctioned Iranian financial sector.