WashingtonEpstein held crypto stakes while advising US Treasury.
Documents show he briefed Treasury officials designing Iran’s sanctions architecture as he invested in the same blockchain sector.
Epstein’s advisory role has drawn no official review, though Iran now routes $8B yearly through crypto exchanges, Treasury figures show.
Sources: Drop Site News
WHY CRYPTO BREAKS SANCTIONS
Traditional sanctions work because nearly every bank touches the dollar system and must obey OFAC's Specially Designated Nationals list. Crypto exchanges that operate outside US jurisdiction — and peer-to-peer transfers that touch no exchange at all — sever that chokehold.
THE TRAVEL RULE GAP
FATF's Travel Rule requires exchanges to share sender and recipient identity for transfers above $1,000 — the crypto equivalent of SWIFT messaging. Adoption is uneven: Western exchanges comply, while exchanges based in jurisdictions like Russia, the UAE, and parts of Southeast Asia often do not, creating arbitrage routes that sanctioned actors exploit.
STABLECOINS AS THE RAIL
Most sanctions-evasion flows do not move in Bitcoin — they move in dollar-pegged stablecoins, primarily USDT (Tether). Tether settles on multiple chains, has minimal KYC at the protocol level, and offers dollar exposure without touching a US bank. Chainalysis estimates a majority of illicit on-chain volume is now stablecoin-denominated.
HOW IRAN'S ARCHITECTURE WORKS
Iran was cut from SWIFT in 2012 and again in 2018. The workaround layered on three rails: barter with friendly states, gold and oil sales priced in non-dollar currencies, and — increasingly — crypto exchanges in Turkey, the UAE, and Russia that convert oil revenue into stablecoins and back into local fiat at the destination.
THE CONFLICT-OF-INTEREST PROBLEM
US Treasury officials are bound by Office of Government Ethics rules requiring divestment from holdings affected by their work. The rules apply to employees, not to outside advisors who brief them — a long-standing gap that has surfaced in financial-crisis advisory roles since at least the 2008 TARP designations.
THE PRECEDENT
In 2023 OFAC sanctioned the Tornado Cash mixer, a piece of open-source code, arguing that smart contracts themselves could be designated entities. A federal court partially overturned the designation in 2024, exposing the unsettled legal terrain where sanctions law meets autonomous code.