The Treasury Department is considering whether to seize roughly $1 billion in cryptocurrency it says is linked to Iran, a step that would rank among the largest government crypto forfeitures ever attempted and mark a sharp escalation in the use of digital-asset enforcement as a sanctions tool.

The potential action was disclosed in a statement from the Treasury Secretary, who framed it as under active consideration rather than a completed enforcement measure. No wallets, exchanges, or legal filings tied to the contemplated seizure have been made public, leaving key details about the underlying assets unresolved.

Iran has faced broad U.S. sanctions for decades, and American regulators have grown increasingly focused on the role…