Born into poverty, an Iranian cryptocurrency mogul, Babak Morteza Zanjani, is in Washington’s and Jerusalem’s crosshairs over a trail of sanction-evation schemes. Can America’s dollar-based targeting of the economies of rogue regimes survive the age of digitally-based coins?The 55-year-old Mr. Zanjani identifies himself on an X account as the “founder and investor of DotOne Group, a leading Iranian business conglomerate with diverse operations across multiple industries.” Behind that benign description is an illustrious character who rose from the slums of Tehran to become a regime villain-turned-savior. In 2013 the Islamic Republic incarcerated Mr. Zanjani at the notorious Evin prison for allegedly stealing $2.7 billion from the country’s oil profits, and sentenced him to death. Yet rather than execute him, the Tehran regime decided to incorporate his talents in evading monetary transactions. As Tehran’s blockade of the Strait of Hormuz tightened this month, the regime started charging ships for access. Ships could pay $2 million-worth in Yuan, or $1 worth, payable in bitcoin, for each carried oil barrel. As a typical tanker carries 2 million barrels, the toll added up to $2 million. “These are not ‘tolls,’” Mr. Zanjani wrote on his Farsi-language X account. To defend against “potential threats and attacks, and for their protection, ships are covered by the insurance of the armed forces by paying rials through the cryptocurrency gateway.” America fought back. “We can’t let a country blackmail or extort the world,” President Trump said Monday. “We’re not going to let that happen.” America initiated a blockade of all ships entering and exiting the strait after the president ordered to seize all vessels that had paid the toll. The Department of Treasury announced a new set of sanctions on Iran in January, targeting “regime’s attempts to exploit digital assets to evade sanctions,” Secretary Scott Bessent said. “Like rats on a sinking ship, the regime is frantically wiring funds stolen from Iranian families to banks and financial institutions around the world.”The sanctions specifically named Mr. Zanjani as well as two digital asset exchanges linked to him that process “large volumes of funds” associated with the Islamic Revolutionary Guards Corps, according to the Treasury Department. “This marks the Office of Foreign Assets Control’s first designation of a digital asset exchange for operating in the financial sector of the Iranian economy,” it said.Tales from the CryptA son of a railway worker, Mr. Zanjani grew up in a poor neighborhood at south Tehran.”There was no indication that the son of such hardships would become a financial genius and a billionaire,” an Israeli reporter, Pazit Ravina, writes in a Makor Rishon profile of the man.Mr. Zanjani combined “an oligarch’s sensibilities with high-tech entrepreneurial spirit to amass a huge fortune, and all of it with no formal education,” Ms. Ravina writes. After selling jewelry at the Tehran bazaar in the 1990s, he landed a job as a chauffeur for the governor of Iran’s central bank. The central banker authorized Mr. Zanjani to trade currency at the bazaar.Large discrepancies between official and market rates served as a valuable lesson for Mr. Zanjani. He incorporated his experience at the bazaar to build an empire that hinged on black holes in global financial markets. At the age of 39, he was worth $13.5 billion, according to an Iranian magazine. That year, though, the regime arrested Mr. Zanjani for withholding $2.7 billion in state money.Mr. Zanjani was sentenced to death, but somehow managed to convince his IRGC jailers that Iran can benefit more by keeping him alive than hanging him. His talent in manipulating markets and evading sanctions indeed proved valuable. By now, Ms. Ravina writes, killing or kidnapping Mr. Zanjani by Israel “would have a more detrimental effect on the Iranian regime than a host of dead Iranian generals who were killed already.”A Binance Scandal The world’s largest crypto exchange, Binance, is being investigated by the Department of Justice for crimes related to sanction-evading transactions. The exposure last November of $1.7 billion transfers from Chinese operators to Iranian and Houthi entities resulted in the firing of several Binance investigators.“Transferring funds via Binance shows that the Iranians know what they’re doing,” a cyber investigator who asked his name be withheld, tells the Sun. “Iran is a crypto superpower. It understands that to evade sanctions it can use the new world of finance, which can in the future be disconnected from the U.S. dollar.”Anyone can create a coin that would be trusted by enough Chinese or Russian operators to disconnect from the traditional banking system, the investigator adds: “Just like nobody can stop all the ugliness in the internet, it would be difficult to block all the worst players from exploiting crypto.”Controlling BlockchainBlockchain-based currencies are traceable and can be intercepted, American enforcers say. “What’s unique about cryptocurrencies is the transparency in blockchain,” a Former Senior Official at the department of treasury, Miad Maleki, tells the Sun. “Moving operationally significant volumes through the blockchain leaves a public, auditable trail that doesn’t exist in ordinary finance or trade-based money laundering.”Such transparency “limits the scale at which groups can evade sanctions,” says Mr. Maleki, now a senior fellow at the Foundation for Defense of Democracies. “There are attribution gaps, but when you pair that transparency with blockchain analytics and traditional intelligence collection, it becomes very difficult for groups like the IRGC, Hamas, or Hezbollah to move serious money through crypto without the USG catching on and exposing that activity.”Tightening ControlsLast July Mr. Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins act into law. Known as GENIUS, the law is designed to extend the global dominance of the U.S. dollar over digital currency. Another legislation, the Digital Asset Market Clarity Act of 2025 cleared the House of Representatives and is yet to be voted on in the Senate. It too is designed to make it harder for bad actors to move funds. In a Wall Street Journal op-ed, Mr. Bessent urged the Senate to vote on the Clarity act to complement GENIUS. “By passing comprehensive digital-asset market-structure legislation, Congress will ensure that the next generation of financial innovation is built on American rails, backed by American institutions, and denominated in American dollars.”“By destroying Iran’s infrastructure, Trump ultimately ends up as a guest in his own pocket,” Mr. Zanjani writes on X. He and other operators hope that Beijing’s long attempt at challenging America’s domination over global finances will end soon, as digital-based coins rise as a currency.
