Young Kim Asks Expert About Iran Using Cryptocurrency To ‘Quietly Move Funds’ And Avoid Sanctions

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During a House Foreign Affairs Committee hearing prior to the congressional recess, Rep. Young Kim (R-CA) questioned Claire Jungman, the Chief of Staff at United Against Nuclear Iran, about Iran’s use of cryptocurrency to avoid paying sanctions.

Transcript

00:00Thank you. I now recognize myself for five minutes. Ms. Jungman, you talk about

00:08the sophisticated and deceptive techniques that the Iranian regime is

00:13utilizing to evade oil sanctions, including through foreign front

00:17companies. Iran also remains heavily dependent on China to sustain its

00:22illicit oil trade, which is like 90% of Iran's oil exports go to China, primarily

00:28independent teapot refineries. So you note that Chinese purchase of Iranian oil

00:35increased by over 20% last year, despite the US sanctions. So in your

00:41perspective, how successful has the US been in identifying these teapot

00:46refineries and front companies? Thank you for your question. I think it's

00:51important to remember that until end of 2024, we saw an administration that was

00:57essentially doing lax sanctions enforcement. As a result of that, Iran was

01:02able to build up its revenues and in turn is, despite these sanctions, is easily

01:09able to replace the vessels that are designated. And until there's a

01:13comprehensive designation across the entire ghost fleet, these vessels will

01:18continue to export Iranian oil to China. When looking at the refineries and

01:22themselves, I think that it was a great first step from this administration to

01:27designate the refineries we saw sanctioned, I guess, two weeks ago. But

01:32unfortunately, designation on one refinery has little to no impact. There has to be a

01:37comprehensive, holistic approach on all of the refineries that are taking on

01:41Iranian oil. Can you talk about the realistic short-term action that the US can take to close that

01:46loophole? What about the long-term actions, short-term and long-term actions that we

01:54can take to close that loophole? Sure. I think that there needs to be, in addition

02:01with sanctions, there has to be negotiation or a diplomatic approach. And I think if

02:05there's any president that will be able to figure out what to hold over China's head,

02:09it will be this president. Thank you. Mr. Roll, one of the recommendations you

02:14provide in your testimony to counter the Iranian regime's malign activities is to

02:19continue investing in the regional military, economic, and commercial

02:24partnerships. Because in your testimony, in quote, regional economic and social

02:29success is as essential to our security interests as their military strength, end

02:35code. So what role do joint security exercises or intelligence sharing

02:39activities with our allies play in disrupting the Iran's illicit activities?

02:44Thank you, Congresswoman. The relationships we have with our Gulf partners and other

02:52regional partners played a profound role in the defense of Israel during Iran's

02:58ballistic missile attack on Israel. We saw years of CENTCOM's investment in those

03:03relationships come to fruition in the smooth air defense of the entire region. And

03:08thousands of lives, hundreds of thousands of lives were saved as a result of that.

03:13But this is a broader target set because the Iranians are moving, as I say, in the Red

03:18Sea Basin. They're moving in the Persian Gulf area. They're moving in throughout the

03:22Arabian Peninsula. And these relationships require a tremendous investment by the CENTCOM team

03:27as well as our Department of Defense as a whole.

03:30Thank you. Ms. Jongman, let me come back to you. You talk about the IRGC's efforts to

03:37diversify its revenue streams, including through cryptocurrency, and how it offers Iran a way

03:43to bypass financial oversight and quietly move funds across the borders. So in your perspective,

03:49how extensively is the IRGC using cryptocurrency to evade sanctions?

03:54We saw around, I think it was $8 billion of transactions from Iran using cryptocurrency.

04:05And I think that this is an area they're obviously tapping into as sanctions are coming out. So

04:13they're moving their money there because it's harder to track. And I think that it's an area

04:16that sanctions could be enforced stronger. So could you talk about some of the policy changes

04:24that you think is necessary to improve that effectiveness of sanctions? And also, what risk

04:30do Iran's cryptocurrency and front company activities pose to global financial integrity?

04:35I will. This is not my area of expertise, but I'm happy to follow up with a written response there.

04:41All right. Well, thank you so much. You know, I asked that because, you know, I want to see if

04:47these tactics could set a precedent for other rogue actors or states. And I think we've been pretty

04:55clear on the reason why we need a digital assets framework to coordinate with our allies to address

05:01those crypto crime. So thank you so much for your testimony. And I yield back. Let's see who is next.

05:08Representative Stanton, I recognize you for five minutes. Thank you very much, Madam Chair.

05:17Iran has built a network of proxies across the Middle East, sowing chaos and instant

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