America’s sanctions authorities have struck at what appears to be the deepest layer yet of Iran’s cryptocurrency activity, freezing hundreds of millions of dollars in digital assets linked to the country’s central bank and allied militant groups.

The US Treasury’s Office of Foreign Assets Control (OFAC) has designated two cryptocurrency wallets as property of Central Bank of Iran, citing connections to the Islamic Revolutionary Guard Corps Qods Force and Hezbollah. In coordination with law enforcement, Tether froze roughly $344m held in the accounts, believed to be the largest on-chain seizure of Iranian sovereign crypto reserves to date.

The move highlights how sanctions enforcement is evolving alongside the financial…