The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury announced sanctions against two Iranian maritime insurance companies this week. They are accused of operating a mandatory insurance program accepting Bitcoin payments, coercing commercial vessels transiting the Strait of Hormuz to purchase policies, and diverting the proceeds to the Islamic Revolutionary Guard Corps (IRGC). The sanctioned entities are Persian Gulf Maritime Insurance Company and Hormuz Secure Maritime Services Administration.

In a statement, the US Treasury described the scheme as extortion rather than legitimate insurance business, noting that the vast majority of vessel detention risks covered by the policies were artificially created by Iran itself. It added that Hormuz Secure Maritime entity was developed under the leadership of Iran’s Ministry of Economic Affairs. Acceptance of Bitcoin and other digital assets as payment is deemed an attempt by the Iranian regime to evade Western sanctions.