Government and Policy Sector

The US Treasury sanctioned crypto exchanges Shelbit and Aban Tether for laundering millions of dollars on behalf of Iran’s Islamic Revolutionary Guard Corps. OFAC identified more than $1 million in crypto transferred from IRGC-controlled wallets to Shelbit and $2 million flowing from Shelbit back to the IRGC. The agency also blacklisted Iranian national Siavash Kayvanpour and his network across Georgia, Poland, and the UAE after tracing over $2 million in digital asset transfers from his wallets to Nobitex, Iran's largest exchange. Aban Tether routed transactions through multiple sanctioned Iranian platforms, including Wallex, Bitpin, and Ramzinex. Washington is cutting off access to digital asset rails alongside Iran's broader shadow banking network. The pressure falls directly on global stablecoin issuers and foreign financial intermediaries, who must blacklist designated wallet addresses or face secondary sanctions. Tether froze $131 million in USDT following a Treasury action against Iran's central bank last month.

A New Mexico state judge ordered Meta to pay $567 million into a youth mental health fund, bringing its total court penalties in the state to $942 million. The ruling hits Meta under a novel application of public nuisance law, treating the company's recommendation algorithms and engagement mechanics like corporate pollution. Judge Bryan Biedscheid allocated $420 million of the new judgment directly toward treatment services for minors, with the remainder slated for local screening and prevention programs over five years. The order hits Meta's operations directly: the court mandated monthly usage caps of 90 hours for minors, paused late-night push notifications, restricted Like counts for underage users, and required the deployment of AI models to catch users under 13. State Attorney General Raúl Torrez originally sought substantial penalties, meaning the total monetary hit is a fraction of Meta's potential exposure. Meta announced it will appeal the decision, arguing that federal online privacy laws complicate local age-verification mandates. The verdict creates an immediate legal blueprint for 33 states currently pursuing consolidated lawsuits against the company in California federal court.

Senate Banking Committee Ranking Member Elizabeth Warren pressed federal regulators on Wednesday to revoke United Texas Bank's national banking charter, arguing the agency illegally allowed the bank to switch regulators while under an active anti-money-laundering consent order. The bank petitioned the Office of the Comptroller of the Currency to convert its state charter to a national one in November 2025. That conversion went through in June despite a 2024 enforcement action by the Federal Reserve Bank of Dallas and Texas regulators over significant anti-money-laundering and virtual currency compliance failures. Section 612 of the Dodd-Frank Act explicitly bans the OCC from approving charter conversions for banks under formal enforcement orders for significant supervisory issues, a rule designed to stop troubled institutions from regulatory shopping. The OCC bypassed this by approving the charter conversion on the condition that United Texas Bank sign a new, near-identical consent order four days after the switch completed. Federal Reserve Governor Michael Barr issued a sole dissent against the move in May, citing unresolved terrorist-financing risks. Warren demanded that top Fed and OCC officials provide the legal justification for the approval and explain why corporate governance requirements present in the original 2024 order were dropped from the new OCC order by August 20.