The United States freezes $344 million worth of Iranian cryptocurrency.

Writing: Liu Honglin

The United States has struck Iran again.

According to reports from CCTV News and other media outlets, on April 24th local time, the U.S. Office of Foreign Assets Control (OFAC), which we often see in news about international financial sanctions, announced a new round of sanctions against Iran and simultaneously updated the “Specially Designated Nationals List.” Notably, this time the U.S. not only targeted traditional financial institutions, accounts, and transaction networks but also included multiple cryptocurrency wallet addresses related to Iran in the sanctions, involving approximately $344 million in frozen crypto assets.

More critical information comes from Tether’s own announcement. According to Tether, it cooperated with OFAC and U.S. law enforcement agencies to freeze over $344 million worth of USDT in two addresses. The announcement also mentioned that these addresses were identified after law enforcement provided relevant information, and the freezing was to prevent further transfer of the related funds.

Therefore, if you only stop at the headline “U.S. freezes Iranian cryptocurrency assets,” that’s not enough.

A deeper understanding should be that this is the U.S. continuing to migrate its well-established offline financial sanctions capabilities onto the blockchain world.

Previously, the U.S. froze bank accounts; now it is freezing on-chain addresses. Previously, the U.S. cut off dollar clearing; now it is also cutting off liquidity for stablecoins.

An invisible financial control force

In the past, when we talked about the U.S.'s global financial influence, it was often not about how many warships the U.S. deployed or how many statements it issued, but about the powerful financial tools it held.

The dollar clearing system, international banking networks, SWIFT communication system, OFAC sanctions list, and compliance obligations of U.S. financial institutions—these elements together constitute the real strength of U.S. financial control.

A country, a company, or even an individual, as long as your fund flows heavily depend on the dollar system, it’s difficult to completely bypass these rules. This type of sanctions was more straightforward in the past: bank accounts frozen, dollar transactions cut off, companies listed on sanctions lists, financial institutions hesitant to provide services. Even if transactions occur outside the U.S., as long as they involve dollars, U.S. financial institutions, or even just the concern of secondary sanctions, the U.S. has ways to make these funds difficult to move.

This is also why many countries, after being sanctioned by the U.S., try to find channels outside the dollar system.

Cryptocurrencies are not the imagined safe haven

Cryptocurrencies have once been understood by many as a possible pathway, and this logic is not hard to follow. On-chain transfers do not require banks, do not go through traditional clearing systems, and do not involve SWIFT. As long as you have a wallet address and private key, theoretically, you can complete transfers. So in recent years, whether it’s sanctioned countries or some gray/black market funds, they have tried to use crypto assets to transfer value.

But this incident shows that things are not that simple.

Blockchain is not a parallel universe completely detached from the real financial order. Especially for stablecoins, although they circulate on-chain, their issuance, reserves, redemption, compliance, and freezing mechanisms still heavily depend on centralized institutions.

Many people usually lump Bitcoin, Ethereum, USDT, USDC, and others into the same basket when talking about “cryptocurrencies.” It’s not a big problem in casual conversations, but from a legal and power structure perspective, they are very different.

Bitcoin is genuinely closer to a decentralized asset. It has no issuing company, no single manager, and no entity that can simply press a “freeze” button upon law enforcement notification. As long as users control the private keys, there is no central authority in the Bitcoin network that can directly freeze your account.

Of course, this does not mean Bitcoin is completely immune to law enforcement in the real world. Law enforcement can still track and seize Bitcoin through exchanges, custodians, OTC traders, on-chain analysis, judicial seizures, etc. But at the protocol level, Bitcoin itself has no issuer that can unilaterally freeze BTC in a specific address.

This is very different from stablecoins.

Mainstream stablecoins like USDT and USDC are essentially centralized institutions’ on-chain dollar claims. They circulate on-chain like other crypto assets, but behind them are issuing companies, reserves, bank accounts, compliance teams, and regulatory pressures. From the day they were born, stablecoins are not purely decentralized assets.

The dual nature of stablecoins

Because of this, stablecoins have a very obvious dual nature.

On one hand, they are indeed faster, cheaper, and more suitable for cross-border flows than traditional bank transfers. Especially in regions where banking systems are underdeveloped, dollar accounts are hard to open, and cross-border remittance costs are high, stablecoins have, in fact, taken on some functions of “digital dollars.” Many ordinary users use USDT not because they understand blockchain deeply, but because it’s convenient, liquid, fast, and has many transaction scenarios.

On the other hand, stablecoins are not like Bitcoin, which has no issuer. The issuer can cooperate with law enforcement, freeze addresses, and restrict fund transfers. Tether’s announcement clearly states that once a wallet is identified as involved in sanctions evasion, criminal networks, or other illegal activities, the issuer can take restrictive measures.

This is something many ordinary users have not fully realized.

You think you hold “on-chain money,” but from a power structure perspective, what you hold is actually a liability issued by a centralized company on the blockchain. Whether this liability can circulate often depends not only on whether you have the private keys but also on the relationship between the issuer, exchanges, custodians, law enforcement, and regulators. Private keys control transfer signatures, but they may not be able to counteract the issuer’s contractual freezing ability, nor can they prevent centralized exchanges and compliance services from blocking the address altogether.

Why does the U.S. promote stablecoins?

This is also why the U.S. has been very attentive to compliant stablecoins in recent years.

Supporting stablecoins, of course, involves considerations of financial innovation, payment efficiency, reinforcing the demand for the dollar, and promoting the development of the crypto industry. But from the perspective of the international financial order, there is a more pragmatic layer: stablecoins allow the dollar system to extend from bank accounts onto on-chain addresses.

In the past, if you used a dollar account, the U.S. could influence you through the banking system; now, if you use dollar stablecoins, the U.S. can still influence you through stablecoin issuers, centralized exchanges, custodians, and compliance services. The technology looks different, the account form has changed, and wallet addresses have replaced bank accounts, but the underlying control logic has not fundamentally changed.

The U.S. is not simply opposed to cryptocurrencies.

On the contrary, the U.S. is increasingly aware that in the world of crypto assets, there are two types of things:

One is like Bitcoin—truly decentralized assets that are difficult to control by a single point; the other is stablecoins and centralized crypto services that can be incorporated into compliance frameworks, cooperate with law enforcement, and be subject to financial sanctions.

For the latter, the U.S. may not oppose but even encourage their compliant development. The reason is pragmatic: as long as stablecoins remain pegged to the dollar, issued by regulated centralized entities, and need to cooperate with OFAC, FinCEN, the Department of Justice, and other law enforcement agencies, they are not substitutes for the dollar system but new interfaces to it.

In the past, the dollar flowed through banks; now, it can also flow on public blockchains. Previously, influence was exerted through banks, clearinghouses, and SWIFT; now, influence can also be exerted through stablecoin issuers, centralized exchanges, on-chain analysis firms, and compliance providers. On the surface, the financial system appears more open, but in terms of control, the core issues have not disappeared—they have only changed in technical expression.

A reminder to crypto industry practitioners

This incident also serves as a direct reminder to those in the crypto industry.

If you are an exchange, wallet provider, payment company, custodian, market maker, or any Web3 financial service involved in stablecoin circulation, you can no longer simply justify your business as “just a technology platform” or “just on-chain tools.” As long as your business involves stablecoins, especially USD stablecoins, you are within the radius of global sanctions and compliance systems. In the past, traditional financial institutions had to do KYC, AML, and sanctions screening; now, many Web3 institutions cannot avoid these either—just the objects of screening have shifted from bank accounts to wallet addresses, from remittance paths to on-chain fund flows.

For entrepreneurs, this is also very practical.

Many projects like to talk about Web3, decentralization, and on-chain finance. But when you look at the actual business structure, if the settlement assets are USDT, customer deposits and withdrawals rely on centralized exchanges, custody depends on centralized institutions, and risk control depends on third-party on-chain analysis firms, then from a legal and regulatory perspective, it may not be a truly decentralized project. Instead, it resembles traditional financial services with a new on-chain interface.

Regulators are not concerned with your slogans but with how your funds flow, who your customers are, who controls the assets, who bears the risks. If you do payments, you face AML and sanctions screening; if you do custody, you face asset freezing and law enforcement cooperation; if you do trading, you face KYC, KYT, and suspicious transaction detection; if you do stablecoin-related business, you cannot avoid issues like issuer regulation, reserve assets, redemption mechanisms, blacklists, and judicial assistance.

A simple reminder for ordinary users: USDT does not equal Bitcoin.

Many people buy USDT because they find it convenient, stable, and liquid. That’s a valid judgment—USDT indeed plays a crucial liquidity role in the global crypto market. But if you think USDT is an asset that cannot be frozen, is completely unaffected by real-world regulation, and is entirely independent of the financial system, then you are mistaken.

The “stability” of stablecoins comes from centralized arrangements behind them. Because of this centralization, they can be stable, redeemable, widely circulated, and frozen by issuers or law enforcement.

This is not a simple good or bad issue but a structural reality that the industry is increasingly aware of.

If your goal is efficiency, liquidity, and dollar valuation, stablecoins certainly have value. But if you want complete censorship resistance, unfreezability, and independence from the real financial order, stablecoins may never be the answer from the start. Many enjoy the convenience stablecoins bring but also imagine them as decentralized assets like Bitcoin—that’s a cognitive dissonance.

For some sovereign states, especially those seeking financial security, this news has even greater practical significance.

In recent years, many countries have discussed reducing reliance on the dollar system. Some want to develop their own digital currencies, some want to promote CBDCs, and others hope to bypass traditional sanctions using crypto assets. But if the final choice is still to use dollar stablecoins, it’s essentially just replacing dollar accounts with dollar tokens. The form has changed, but the underlying power structure remains.

You no longer use U.S. bank accounts, but you use dollar stablecoins within U.S. regulatory reach. You no longer go through SWIFT, but you rely on stablecoin issuers that cooperate with OFAC. You think you’ve moved from off-chain to on-chain, but U.S. sanctions tools are following you onto the chain.

For a country truly pursuing financial security, this is not a minor technical issue but a fundamental question of who controls the underlying financial infrastructure.

Therefore, true financial security is not simply asking “is it on-chain,” but more fundamental questions: who issues the assets, where are the reserves, who controls redemptions, who is affected by compliance obligations, can addresses be frozen, and is the critical infrastructure in someone else’s hands? Without clear answers, talking only about “on-chain finance,” “digital currencies,” or “stablecoin innovation” remains superficial.

Of course, it’s also wrong to think that stablecoins have no value because they can be frozen. That’s an overly simplistic judgment.

The value of stablecoins precisely comes from their contradictions. They retain the efficiency of blockchain circulation while maintaining compliance interfaces of the real financial world. Because they are not fully decentralized assets, they are more easily accepted by institutions, more suitable for payment, clearing, cross-border trade, and financial services.

But because of this, they are not a pure “counter-sanction tool.”

They are more like an upgrade of the dollar system under new technological conditions. In the past, dollars moved through bank accounts and clearing systems; now, dollars can circulate via stablecoins on public blockchains. Previously, influence was exerted through banks, clearinghouses, and SWIFT; now, influence can also be exerted through stablecoin issuers, centralized exchanges, on-chain analysis firms, and compliance providers. Technology makes the dollar move faster, cover more ground, and cost less, but it does not fundamentally change the original power structure.

This is not just a typical sanctions news but a signal: global financial sanctions are entering the on-chain era.

Previously, the U.S. froze bank accounts; now, it is freezing stablecoin addresses. Previously, sanctioned entities worried about losing access to dollar accounts; in the future, they will also worry about losing access to on-chain dollars.

This is the most noteworthy aspect of the U.S. freezing $344 million in Iranian crypto assets.