Israel seizes $187 million in Iran-related encryption assets, stablecoins become a new front in sanctions.

The Israeli Ministry of Defense announced the seizure of 187 crypto asset wallets related to the Iranian Islamic Revolutionary Guard Corps through the National Bureau for Counter-Terrorism Financing (NBCTF). Although these wallets currently hold approximately 1.5 million USDT, they have historically processed a total amount of up to 1.5 billion USD.

This action took place a few days after the U.S. Department of Justice seized 584,741 USD from an Iranian national linked to the IRGC drone program. This marks an escalation in the international community's crackdown on Iran's use of Crypto Assets to evade sanctions.

01 Seizure Action: Israel Strikes, Freezes IRGC Crypto Assets

Israeli Defense Minister Yoav Gallant signed an order to seize these Wallets based on the 2016 Anti-Terrorism Act. Israeli officials stated that although these Wallets currently hold about 1.5 million USD in USDT, historically they have processed funds amounting to 1.5 billion USD.

The National Bureau of Counter-Terrorism Financing (NBCTF) stated in the seizure order that they "are confident that these crypto asset wallets" belong to the IRGC and "are used to carry out serious terrorist crimes." The IRGC is designated as a terrorist organization by several countries, including the United States, the European Union, and Israel.

This is not the first time Israel has taken such action. In 2022, the Israeli Ministry of Defense confiscated crypto wallets associated with Hamas funding, seizing 30 wallets containing tens of thousands of shekels.

02 Technical Cooperation: Cooperation between Blockchain Analysis Companies and Stablecoin Issuers

The blockchain analysis company Elliptic played a key role in this operation. The company has urgently incorporated these seized addresses into its next-generation Holistic blockchain analysis technology for users to screen and track.

Tom Robinson, co-founder and chief scientist of Elliptic, pointed out that the company cannot confirm whether these Wallets are indeed owned by the IRGC. He also mentioned that "some of the addresses may be managed by encryption services and could be part of the Wallet infrastructure facilitating transactions for multiple users."

Tether has also cooperated with this action. Among the 187 addresses listed by the NBCTF, Tether blacklisted 39 addresses on September 13th. This action prevents these Wallets from making any further USDT transactions, effectively freezing the 1.5 million USDT held by these addresses.

03 Historical Background: IRGC has long utilized encryption to evade sanctions

Iran has a long history of using Crypto Assets to evade international sanctions. In 2020, Iranian General Saeed Muhammad publicly called for the use of Crypto Assets to escape sanctions.

He stated at the time: "We need to establish more complex mechanisms to evade sanctions. To avoid sanctions, we must develop solutions with partners from other countries, such as commodity exchanges and the use of crypto assets."

In December 2024, the U.S. Department of the Treasury will add a cryptocurrency address holding $332 million USDT to its sanctions list. These addresses are linked to Sa'id Ahmad Muhammad al-Jamal, who has been sanctioned for funneling tens of millions of dollars to the Houthi movement in Yemen.

04 Broader Crackdown: International Coordination Against Iran's Crypto Network

Israel's actions are the latest move in a series of international efforts aimed at combating the IRGC's crypto network. Just last week, the Massachusetts Attorney General's Office filed a civil forfeiture lawsuit against Mohammad Abedini.

Abedini is the founder of Iran's SDRA company, which provides technical support for Iran's "Shahed" military drones. The U.S. Department of Justice stated that these tokens are stored in a non-custodial crypto assets wallet.

In June 2025, the pro-Israel hacker group Gonjeshke Darande stole $90 million from Nobitex, Iran's largest crypto assets exchange, accusing it of having links with the IRGC. Elliptic and other organizations have linked Nobitex to the IRGC.

05 Transparency and Challenges: The Double-Edged Sword Effect of Blockchain

The inherent transparency of blockchain technology provides comprehensive visibility into the flow of funds, enabling all ecosystem participants to play a key role in identifying and reducing illicit funds.

However, this transparency is a double-edged sword. While it enables the tracking of illegal fund flows, it also brings privacy challenges. As the Tornado Cash case has shown, there is a tension between privacy tools and regulatory compliance.

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) imposed sanctions on Tornado Cash in August 2022, alleging that it was used for money laundering, particularly by the North Korean hacking group Lazarus, processing over $1 billion in illegal funds.

06 Regulatory Impact: A New Era of Crypto Assets Compliance

These events collectively mark the arrival of a new era of compliance in Crypto Assets. Stablecoin issuers like Tether proactively freezing addresses in compliance with government orders has become the new normal.

Industry experts believe that this seizure operation is a test case for global enforcement of encryption. By freezing assets on the blockchain, Israel demonstrates that even anonymous transactions can be deciphered through advanced analytical tools, which may have a deterrent effect on illegal actors.

However, this has also raised concerns about the centralization issues of stablecoins like USDT, where issuers such as Tether can comply with government orders, effectively acting as gatekeepers.

07 Future Outlook: Continuous Game and Technological Evolution

Iran has demonstrated adaptability by turning to alternative exchanges and privacy-focused coins. This indicates that these seizure actions are tactical victories rather than strategic defeats.

For blockchain professionals, this event highlights the necessity of enhancing compliance tools. Companies like Elliptic and TRM Labs will continue to play a key role in identifying and tracking illicit flows of funds.

In the long run, such events may drive the development of more privacy technologies, but they will also prompt a strengthening of regulatory frameworks. The crypto industry needs to find a balance between innovation and compliance.

Conclusion

Israel has seized 187 crypto asset wallets related to the Iranian Islamic Revolutionary Guard Corps, marking the entry of inter-state financial warfare into a new era of digital currency. This action not only demonstrates the maturity of blockchain analysis technology but also highlights the dual role of stablecoins in cross-border capital flows: both as a transparent and traceable chain, and as a tool for evading sanctions.

In the future, as regulatory technology continues to improve and privacy protection technologies evolve, this cat-and-mouse game occurring in the Crypto Assets field is likely to further escalate. The international community's coordinated crackdown and the evasion tactics of sanctioned countries will continuously evolve, creating a prolonged digital financial war without smoke.