European Parliament president highlights case of jailed Iranian twins

The US Attorney's Office for the Southern District of New York said on Monday it had filed a civil forfeiture complaint over the assets, which prosecutors said were linked to a network that moved more than $1.5 billion in proceeds from Iranian oil sales.

The IRGC is designated by the United States as a terrorist organization.

Prosecutors target oil payment network

"Today's action demonstrates our determination to deprive the Government of Iran and its terrorist proxies of the illegal money they rely on to threaten the lives and safety of the citizens of the United States and elsewhere," Deputy US Attorney Sean S. Buckley said.

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  Secret documents expose new network selling sanctioned Iranian oil

Buckley said Iran relied on black-market sales of sanctioned crude oil to fund its military and other activities.

"As alleged in the complaint filed today, the Government of Iran used a network of cryptocurrency actors in China and elsewhere to launder more than $1.5 billion in illicit oil money intended to benefit the Iranian military and the terror-designated IRGC," he said.

Chinese companies named in complaint

The complaint said two Chinese companies, Blessed Trust and Hexa Whale, used accounts at cryptocurrency exchange Binance in the United Arab Emirates to move proceeds from Iranian oil sales.

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  Iran’s oil exports near zero as Persian Gulf flows recover

Prosecutors said Blessed Trust presented itself as a wealth management or virtual asset custodial services firm but received and transferred proceeds from Iranian crude oil and petroleum product sales. They said it also helped convert traditional currency into cryptocurrency, including through US-based cryptocurrency issuers.

Hexa Whale presented itself as a commodities broker but provided similar services and worked with Blessed Trust and related entities, according to the complaint.

More than $1.5 billion moved through addresses

The complaint said a group of linked, unhosted cryptocurrency addresses identified as "Entity A" received and distributed more than $1.5 billion in proceeds from Iranian oil sales.

Prosecutors said the addresses sent funds to money services businesses and cryptocurrency addresses linked to the IRGC, as well as to an Iranian cryptocurrency exchange.

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  Iran loses ground on trade as war hits oil and non-oil exports

They said transactions involving Blessed Trust, Hexa Whale and people associated with the companies were structured to conceal the source, ownership and nature of the funds. The complaint also said the two companies used the US financial system to send or receive tens of millions of dollars.

FBI says action cuts funding

"Today's complaint demonstrates the FBI's ability to follow the money, root out illicit schemes, and halt the stream of cryptocurrency to any government attempting to evade sanctions or committing terrorist activities," said James C. Barnacle Jr., assistant director in charge of the FBI's New York field office.

"By cutting off funds raised by the black-market sale of crude oil, the Iranian military and terrorists are weakened," Barnacle said.

The US Attorney's Office said a civil forfeiture complaint contains allegations that money or property was involved in, or represents proceeds from, a crime. The allegations have not been proven, and a court must rule in favor of the United States before the assets can be forfeited.

Chinese President Xi Jinping said on Saturday that Beijing was willing to work with other BRICS members to help restore peace and stability in the Persian Gulf and the Middle East, offering a four-point proposal aimed at reducing tensions, ending hostilities and promoting peace.

Xi’s remarks at the opening of the 18th BRICS summit in New Delhi marked China’s first public signal since the Iran-US war began six months ago that it was willing to take an active role in addressing the crisis through a coordinated BRICS effort.

Beijing has so far stopped short of directly involving itself in mediation over the conflict. It has condemned attacks on Iran, issued a broad four-point proposal during Xi’s visit to Cairo in April and called on the parties to return to negotiations. Some analysts have also said China has quietly supported mediation efforts by Pakistan and Qatar in recent months.

Mixed reactions in Iran

Former Iranian foreign minister Mohammad-Javad Zarif welcomed China’s offer on Sunday in a post on X, describing it as an opportunity to reduce tensions.

He said the move provided a “timely opportunity to ease tensions” and added that multilateral diplomacy was the only viable path to achieve peace.

Ramin Mehmanparast, a former Iranian foreign ministry spokesman, told Donya-e Eqtesad that China had clear economic and strategic interests in stability in the Persian Gulf.

“China, in addition to seeking a role in the balance of power in the world, certainly sees stability in the Persian Gulf and the Strait of Hormuz as being in line with its long-term economic interests and views tensions and conflict in this region as contrary to its interests,” he said.

He added: “The Chinese are expected to become more seriously involved and, certainly, they have the necessary capacity to exert influence.”

Rahman Ghahremanpour, a senior Middle East researcher, also said Xi’s initiative was unlikely to have been made by chance.

Xi’s comments about BRICS efforts to promote peace in the Middle East should be taken seriously, he told Donya-e Eqtesad. China has both the diplomatic capacity and the incentive to act, he said, given its concerns that a prolonged crisis could harm its economic interests and regional standing.

Ghahremanpour also wrote on X that if reports of China’s willingness to mediate were accurate, they would represent a significant development that was probably not announced without coordination with Tehran.

He suggested that US President Donald Trump’s comments about an end to the war after the US midterm elections could potentially be connected to reports of China’s interest in mediation.

But not all Iranian reactions were positive.

Heshmatollah Falahatpisheh, a former chairman of parliament’s National Security and Foreign Policy Committee, accused Xi of seeking closer alignment with Washington.

“By presenting a plan for negotiations, Xi Jinping is trying to please Trump and, in return, obtain concessions from the United States over new trade tariffs,” he told Nameh News.

Reformist politician Abbas Akhoundi, who views the US-Iran war partly through the lens of US-China competition over resources transported through the Persian Gulf, argued that Tehran would ultimately need to engage with Beijing over regional security.

“I believed, and still believe, that achieving a security regime in the Persian Gulf can be achieved through dialogue with China,” he wrote on X. “Between the lines of Mr Xi’s recent positions, I understand that if we do not move towards a mechanism for the security of the Strait of Hormuz in coordination with China, we will come under pressure from China and conditions will become harder for the Iranian government and people.”

Was Xi offering to mediate?

Some Iranian media outlets and analysts have cautioned against interpreting Xi’s remarks as a formal offer to mediate between Tehran and Washington.

They argue that Xi did not explicitly refer to mediation between Iran and the United States. Instead, he stressed cooperation among BRICS members in efforts to restore peace and stability in the Persian Gulf and Middle East.

Hamed Vafaei, a professor of Chinese literature at the University of Tehran and a China researcher, said the interpretation of Xi’s remarks as a Chinese offer to mediate was “a free interpretation” of his comments.

In a note titled “What did Xi Jinping say in India and what did we hear in Iran?” he published on X, Vafaei said the remarks should not be regarded as a sudden development or an official announcement by Beijing that it would mediate between Tehran and Washington.

Rather, he said, they should be viewed as part of a gradual evolution in China’s West Asia diplomacy that began in the early stages of the 12-day war and has continued since.

“Xi Jinping’s position today, for experts who have closely monitored and analysed Beijing’s positions over the past months, contains only one important signal, several emphases and, in his own words, a kind of pioneering declaration of responsibility for the times — not a new position announcing mediation between Iran and America,” Vafaei wrote.

Why Beijing is cautious

Ghahremanpour said China was likely to proceed cautiously because it faced risks on both sides.

“On the one hand, the Chinese are concerned that Iran may not accept their demands, and on the other, they are worried that the United States may not welcome their initiative, and therefore they are acting very cautiously,” he told Donya-e Eqtesad.

“If China tries to mediate but the problem is not resolved, differences between Iran and the countries of the region will intensify and China will be regarded as one of those responsible,” he said. “If it also enters at the global level and faces a negative response from either Iran or the United States, its credibility will be called into question.”

Canada-based analyst Shahir Shahid-Saless said Xi’s caution was understandable given the need to simultaneously manage China’s relations with the United States and Israel while preserving its important strategic and economic relationships with Iran and the Arab states of the Persian Gulf.

A failed Chinese mediation effort, he said, could impose a significant political and reputational cost on Xi personally and seriously damage his credibility.

“By placing the issue within BRICS, Xi spreads the responsibility and avoids making China, and himself, the sole owner of a possible failure,” he wrote.

“There is also a fundamental obstacle: it is difficult to imagine Washington entrusting negotiations over the Iran war to BRICS, an organization increasingly presented as an alternative to Western-led institutions and one in which Iran itself is a member,” he added.

Saudi Arabia is taking a harder military posture after efforts to defuse tensions with Tehran stalled. Riyadh had sought de-escalation, wary that a wider conflict could threaten the regional stability on which its economic ambitions depend.

A meeting planned for Monday between Iran and several Persian Gulf states over arrangements for the Strait of Hormuz was postponed after Saudi Arabia requested a delay, amid Riyadh’s growing frustration over attacks by Iran-aligned groups.

That leaves Riyadh with options, none of them ideal.

Saudi Arabia does not want an all-out war. But the Houthis may be testing how long the kingdom can afford to avoid one.

Saad bin Tefla Al Ajmi, Kuwait's former information minister, said Saudi Arabia has so far exercised patience but its military options remain open.

That restraint reflects what the kingdom has at stake. Saudi Arabia has spent years trying to avoid being dragged back into direct conflict with the Houthis, while its economic transformation depends heavily on regional stability.

"There is no stability, there is no development. There is no stability, there is no prosperity," Al Ajmi told Iran International.

But Houthi attacks on Saudi territory and advances along Yemen’s Red Sea coast are making that restraint increasingly difficult to maintain. The Saudi-led coalition said Houthi missile and drone attacks on Khamis Mushait, Abha and Taif on Monday injured 13 civilians.

Al Ajmi believes some of the Houthis' recent territorial gains could be reversed, particularly if Saudi Arabia decides to deploy its overwhelming advantage in air power. He described Houthi forces operating along the flat Tihamah coastal plain as "sitting ducks."

Saudi Arabia led a military intervention against the Houthis beginning in 2015, with direct hostilities largely subsiding after a UN-brokered truce began in 2022. Years of bombardment failed to eliminate the movement, and Riyadh subsequently spent years trying to avoid being pulled back into a full-scale Yemen war.

The question now is whether the Houthis are pushing that restraint too far.

Houthis risk overplaying their hand

The battlefield in Yemen remains fluid. The Houthis have seized Mokha, Dhubab and Perim Island and expanded their control along Yemen’s Red Sea coast, while Saudi-backed government forces have regrouped and vowed to retake lost territory. That leaves open the question of how durable the Houthis’ gains will prove.

"The Houthis fought the Saudis and the Saudi militias for years. They also have a history of being overextended," Alberto Fernandez, a former senior US diplomat, told Iran International.

Fernandez said the Houthis may have pushed too far.

"I think we could see them lose some of the territory that they've gained," he said.

"They're arrogant. Yes, they're motivated by ideology. And when you're motivated by ideology and you're arrogant, you tend to sometimes overextend," Fernandez said.

But the Houthis are also betting on reluctance from both Saudi Arabia and the United States to become drawn more deeply into the conflict.

Saudi Arabia's attempt to remain outside the wider Iran war has already "certainly backfired on them," Fernandez said.

The uncertainty over how much the kingdom can rely on its allies only complicates its options.

Fernandez described the relationship between Washington and Riyadh as increasingly complicated. The Saudis, he said, felt blindsided by the United States launching the Iran war, while Washington in turn felt unsupported by Riyadh.

That strain has become more visible as Crown Prince Mohammed bin Salman sought direct US military action against the Houthis, while Trump declined requests for US strikes and Washington limited its support to intelligence and targeting assistance.

That uncertainty also extends to the Makkah Joint Defense Agreement, signed by Saudi Arabia, Turkey and Pakistan on August 7. The pact says an armed attack against any one of the three countries will be regarded as an attack against all.

"So far [it] has turned out to be a paper tiger," Fernandez said, joking that the arrangement appeared to have the equivalent of a health insurance "pre-existing condition clause."

Saudi Arabia looks elsewhere for help

As Washington hesitates, Saudi Arabia is looking elsewhere.

British Prime Minister Andy Burnham is considering Saudi requests for diplomatic and military support to counter the Houthis, Bloomberg reported Monday, as London grows increasingly concerned about the economic consequences of another expanding front in the Iran war.

The requests come as Britain has backed Saudi Arabia’s right to defend itself against Houthi attacks and stressed the importance of protecting freedom of navigation and global trade through the Red Sea.

The widening conflict has raised the stakes beyond Yemen. Houthi gains along the Red Sea coast and around Bab el-Mandeb, combined with attacks on Saudi energy infrastructure, are putting pressure on westward export routes that have become more important while shipping through the Strait of Hormuz remains constrained.

The Houthi offensive and attacks on Saudi energy infrastructure have added further pressure to oil markets already strained by the Iran war. Brent crude climbed above $108 a barrel Monday after attacks shut down Saudi Arabia’s East-West pipeline, a crucial alternative export route while shipping through the Strait of Hormuz remains constrained.

"It gets to push up oil prices a little more," Fernandez said.

"For them, every dollar that prices go up, for them they see that as a plus for the regime, putting a little more pressure on the Americans and the Europeans."

The paradox for Tehran is that the greater the disruption caused by the widening conflict, the stronger the incentive may become for governments outside the region to help Saudi Arabia contain the threat.

Iran does not need to control the Houthis

"The broader strategic danger is that Iran does not need to control the Houthis completely to benefit from their actions," Mohamed Fahmy, a journalist and Middle East political analyst, told Iran International.

"It only needs the movement to retain sufficient military capability, autonomy and motivation to pressure critical maritime routes while Tehran maintains distance from the confrontation."

Fahmy cautioned against reducing the Houthis to an Iranian proxy.

They are "an intensely nationalist movement with their own domestic agenda and deeply rooted local interests," he said.

Their relationship with Tehran is nevertheless exceptionally close. Iran has provided weapons, military technology, intelligence and other support, Fahmy said, while the strategic interests of the two sides increasingly converge.

That convergence has become particularly consequential around the Red Sea and Bab el-Mandeb.

"One of the Houthis' strategic objectives is to exert control over Yemen's Red Sea coast and the northern Red Sea, where they can increasingly influence who is permitted to transit and who is not," Fahmy said.

For Tehran, the Houthis therefore provide an additional source of pressure on its adversaries without requiring direct Iranian military involvement.

But Saudi Arabia's military answer is not straightforward.

Fahmy pointed to Saada, the Houthis' traditional stronghold and geographical heart of their power, which has been repeatedly targeted by Saudi forces since the intervention began in 2015. Despite years of Saudi-led bombardment and military pressure, the Houthis survived and retained significant military capabilities.

"A limited campaign of additional strikes is therefore unlikely to fundamentally diminish their ability to threaten shipping or project power across the Red Sea," Fahmy said.

That leaves Saudi Arabia confronting a difficult choice.

Continued restraint risks allowing the Houthis to impose greater costs on the kingdom and giving Tehran additional leverage. But a renewed military campaign carries risks Riyadh knows well after years of fighting failed to eliminate the movement.

Iran has gained leverage as the war reaches Saudi Arabia. But the more Houthi attacks raise the costs for Riyadh, the greater the risk that Tehran’s leverage provokes the response that ultimately erodes it.

President Donald Trump said Iran wanted an agreement and left open the possibility of US engagement, while Iranian President Masoud Pezeshkian said Tehran was ready for talks, including on its nuclear program, if Washington lifted sanctions and stopped negotiating “through force.”

“The failing Nation of Iran wants to make a deal, quickly and badly,” Trump wrote on Truth Social. “I will determine whether or not the U.S.A. will choose to engage - The concept of which we are open to.”

Pezeshkian, speaking to India Today, said Iran was “ready for dialogue” within the framework of the Nuclear Non-Proliferation Treaty and international law. He questioned why Washington wanted new negotiations rather than building on an understanding he said had already been reached in Pakistan with help from Islamabad and Qatar.

“Our position is the same as what we said before: the United States should lift its sanctions, abandon unilateralism, not speak to us through force, and open the way so that we can live like the rest of the world,” Pezeshkian said.

The diplomatic signals came alongside a markedly different message from Washington’s economic campaign.

The US Treasury on Monday imposed Iran-related sanctions on Russia’s VTB Bank, accusing the lender of helping Tehran evade restrictions through banking relationships and payment arrangements.

Treasury said VTB had established correspondent relationships with sanctioned Iranian financial institutions, taken steps to move billions of dollars in frozen Iranian assets and created a rial- and ruble-based settlement system to increase trade between Russia and Iran.

The measure expanded Operation Economic Outcast, launched in August to sever what Treasury describes as Iran’s remaining financial lifelines. Treasury Secretary Scott Bessent said the department would continue targeting those providing financial, technological or material support to Tehran and would “identify, expose, and isolate Iran’s enablers.”

Bessent also renewed a call for whistleblowers worldwide to provide information on networks facilitating Iranian financing, saying people with actionable information could qualify for an award regardless of where they live or work.

The contrast between talk of negotiations and tightening pressure was also visible around the Strait of Hormuz, where Washington and Tehran offered sharply different accounts of what happened to the Panama-flagged tanker EL GAIA.

The IRGC Navy said the tanker struck a naval mine while attempting to pass through what it called a restricted route south of the strait, causing an explosion and major fire. It said the Strait of Hormuz remained closed and under its “smart control.”

US Central Command rejected that account, saying EL GAIA had been struck by an Iranian missile last month and rendered inoperable before Iran hit it again with a drone over the weekend while it sat off Oman. CENTCOM said the vessel was being towed by a regional partner and called the IRGC account false.

Another reported incident late Monday added to the uncertainty.

Hormozgan deputy governor Ahmad Nafisi told Mehr news agency that two "fishing" boats had been struck by drones about 12 miles from Larak Island and 30 miles from Kargan port, leaving several crew members missing. Search-and-rescue operations were underway, he said.

There was no immediate independent confirmation of the attack or who may have carried it out.

The Treasury Department’s Office of Foreign Assets Control designated VTB under Executive Order 13902 for operating in Iran’s financial sector, expanding Operation Economic Outcast to one of Russia’s largest banks. The action follows measures targeting banking channels in Turkey and the United Arab Emirates.

Treasury said VTB established correspondent relationships with sanctioned Iranian financial institutions over the past three years, took steps to move billions of dollars in frozen Iranian assets and created a settlement system using rial- and ruble-denominated accounts to increase trade between Russia and Iran.

VTB has also had a presence in Tehran since 2023, when it became the first Russian bank to open a representative office in Iran. The bank stressed at the time that the Tehran operation was a representative office rather than a full branch. Treasury said VTB began taking steps in January 2025 to expand its presence in the Iranian capital.

“Under Operation Economic Outcast, Treasury will continue to target and disrupt those who provide material, technological, or financial support that allows the Iranian regime to sustain its terrorist enterprise,” Treasury Secretary Scott Bessent said.

“Treasury will not tolerate any support to the regime and will continue to identify, expose, and isolate Iran’s enablers,” he added.

VTB sanctioned again

Monday’s action does not mark the first time Washington has sanctioned VTB.

The bank was subjected to US sectoral restrictions in 2014 following Russia’s actions in Ukraine and was fully blocked by OFAC in February 2022 under Executive Order 14024 following Russia’s invasion of Ukraine. Treasury also designated VTB in January 2025 under Executive Order 13662. The new action adds an Iran-specific sanctions authority targeting its activities in Iran’s financial sector.

Treasury said the Iran designation creates additional sanctions exposure for foreign financial institutions conducting certain transactions with VTB and urged institutions that continue dealing with the Russian lender to sever those relationships.

The move was foreshadowed by Bessent on September 10, when he said Washington would sanction an unidentified “large bank” on Monday as it continued ratcheting up pressure on Iran.

“We are just going to continue with this process until everyone stops dealing with this regime,” Bessent told Real America’s Voice.

“We will make it so unprofitable that if you want to risk an extinction-level event for your company or for your person, your personal finances, then have at it. But we are coming for you,” he said.

Bessent had earlier warned financial institutions on X after Washington sanctioned Turkey’s Golden Global Bank on September 4.

“Financial institutions continue to find out the hard way that we are serious about Operation Economic Outcast,” he wrote, adding: “We know who you are, we know where you are.”

Economic D-Day

Bessent launched Operation Economic Outcast on August 24, describing it as an economic “D-Day” aimed at severing the remaining financial lifelines sustaining Iran.

The initiative goes beyond imposing restrictions on Iranian entities themselves by threatening foreign companies and financial institutions with loss of access to the US market and financial system if they continue doing business with Tehran.

The VTB action follows two significant moves against foreign banking channels used by Iran.

On September 4, Treasury sanctioned Turkey’s Golden Global Bank and two subsidiaries, alleging the lender facilitated tens of millions of dollars in transactions for the Revolutionary Guards’ Quds Force and helped move Iranian oil revenue from China into Turkey, where money exchangers could convert funds into cash and gold. Golden Global denied the allegations.

On August 28, US authorities took a different approach against the UAE operations of Egypt’s Banque Misr. The Financial Crimes Enforcement Network proposed cutting the branches off from US correspondent banking after identifying them as a “primary money laundering concern.”

The measure was not an OFAC asset-freezing sanction and applied to Banque Misr’s UAE operations rather than the Egyptian parent bank more broadly.

FinCEN estimated that Banque Misr UAE processed approximately $1.8 billion between January 2024 and June 2026 for 103 companies potentially connected to Iranian shadow-banking networks.

Iran’s overseas banking network

An Iran International investigation published September 2, however, found that Iran’s overseas banking network extended considerably beyond the institutions Washington had targeted.

Based on leaked Bank Parsian correspondence and transaction records spanning November 2022 to May 2023, the investigation identified 15 banks in the UAE and China through which Iranian financial institutions conducted international transactions. Thirteen had faced no publicly recorded US penalties or enforcement action over their involvement at the time of publication.

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  US crackdown leaves much of Iran’s shadow banking untouched

The records included 33 payment instructions worth roughly $36 million. One showed Bank Parsian directing Bank Shahr to transfer 3.06 million UAE dirhams purchased from Iran’s central bank from a trustee account to an account at Banque Misr.

Iran International found no evidence that the UAE and Chinese banks knowingly helped Iran circumvent US sanctions.