US Crypto Regulations and Iran Sanctions

Mostly through a single trading account to help finance

Iran's Revolutionary Guard. Binance's own

internal compliance team flagged the account repeatedly,

but it stayed open anyway. Now, you might expect

an administration preparing an economic D-Day against

Iran to take a dim view of an exchange that Iran

sanctions buster was using as a payment artery.

Instead, the administration has been the crypto

industry's

most enthusiastic patron. Trump even pardoned

Binance's founder, CZ, who had pleaded guilty

to an anti-money laundering violation and served four months in

prison, and Trump signed the Genius Act, the

first big piece of US crypto legislation, which builds a

federal framework for stablecoins.

The way this links back to Scott Bessent is that the Genius Act

requires stablecoin issuers to back their coins

one-for-one with liquid reserves, and the reserve asset of

choice is short-dated US Treasury bills.

Bessent has said out loud that he expects the stablecoin

market to grow enormously to something like $2

trillion, and that this will create a large new

source of

demand for the short-term Treasury bills that the Treasury is now

busy issuing to buy back longer-dated bonds.

What this means is that the same crypto system that helps

Iran evade the sanctions is also being cultivated

to help finance the Treasury's bond strategy.

Bessent needs the thing that he's supposed to be shutting

down. Critics have a name for the sector the

Genius

Act creates, a digital shadow banking system.

So we have a Treasury Secretary claiming to be running an

economic blockade against Iran while the US government

deregulates and grows the shadow banking system Iran

uses to work around it. It's a bit like building a very

expensive border wall and then every 50 yards installing

a revolving door and taking a cut of the

turnstile. So anyhow, we have a blockade

with two great big holes in it, both of them deliberate,

and a Treasury Secretary who can't fully close either without

hurting himself. If the military really is the ultimate

intervention, I assume that the next move is sending in the Navy

SEALs to seize Iran's private keys.

I'm not sure which branch is best trained to breach a cold

storage wallet, but on current form I'd assume it's under

review.