Authorities Target Iran-Based Darknet Operator as Bitcoin Profits Grow

US Customs also started releasing previously sanctioned Chinese-made Bitcoin mining equipment after months of regulatory scrutiny. In parallel, a heated debate over crypto regulation and national security unfolded in Congress, with Representative Sean Casten warning of crypto’s role in illicit finance, while Representative Warren Davidson pushed back by arguing for financial privacy. 

US Sanctions Darknet Marketplace Operator

The United States imposed sanctions on Behrouz Parsarad, which is an Iran-based operator of the now-defunct darknet marketplace Nemesis, along with his cryptocurrency addresses, which recently benefited from Bitcoin price fluctuations. The US Office of Foreign Assets Control (OFAC) announced on March 4 that Parsarad established Nemesis in 2021, and used it as a platform to facilitate the sale of drugs, false identification documents, hacking resources, and other illicit services catering to cybercriminals.

(Source: US Department of The Treasury)

With the sanctions in place, US citizens are prohibited from engaging in transactions with Parsarad or any companies where he has more than a 50% stake. According to blockchain analytics firm Chainalysis, the sanctioned assets include 44 Bitcoin and five Monero addresses that received more than $850,000 between July of 2022 and March of 2024. The total volume of cryptocurrency handled by Parsarad is estimated to exceed $1.6 million, largely due to price appreciation over time.

The majority of Parsarad’s crypto transactions were tied to Nemesis, but he also sent over $12,000 to various darknet marketplaces like ASAP Market, Incognito Market, and Next Generation. His activities also showed indirect exposure to cryptocurrency mixers, which is a method often used to obscure the origin of illicit funds. OFAC revealed that before a joint US, German, and Lithuanian law enforcement operation shut down Nemesis and seized its servers in March 2024, the marketplace grew to host 30,000 active users and 1,000 vendors. The platform had built-in money laundering features that allowed criminals to conduct transactions with relative anonymity.

(Source: Chainalysis)

In addition to providing a hub for cybercriminals, Parsarad was actively involved in laundering virtual currencies for narcotics traffickers and other illicit actors operating on Nemesis, according to OFAC. Authorities estimate that he amassed millions of dollars throughout the marketplace’s existence. Despite law enforcement actions, he reportedly continued efforts to re-establish his operations.

While Western law enforcement agencies have cracked down on darknet marketplaces, the ecosystem is still highly active. TRM Labs’ 2025 Crypto Crime Report estimates that darknet markets generated more than $1.7 billion in revenue in 2024. This was only a slight increase from the previous year. 

Russian-language darknet marketplaces continue to dominate, benefiting from limited enforcement action by Russian authorities, while Western darknet markets face growing instability. The start of 2024 saw multiple high-profile exit scams, including the sudden disappearances of Bohemia Market and Cannabia Market in January, which Dutch authorities later linked to an ongoing investigation. In March, Incognito Market also collapsed under suspicious circumstances, with its administrator “Pharoah” allegedly attempting to extort users before shutting down the platform.

Despite the enforcement efforts and operational disruptions in Western markets, darknet marketplaces are very resilient, with new actors constantly trying to fill the void left by shuttered platforms. 

US Customs Releases Seized Bitcoin Miners

US Customs and Border Protection (CBP) reportedly began releasing Chinese-made crypto mining equipment after months of detainment at various ports of entry. According to Taras Kulyk, CEO of Synteq Digital, thousands of mining units have been released after the seizure of up to 10,000 units. Kulyk suggested that some CBP officials were intentionally creating obstacles for the Bitcoin mining sector. Ethan Vera, chief operating officer at Luxor Technology, confirmed that while some shipments were being released, the majority remained held.

The delays primarily affected Bitmain Antminer application-specific integrated circuits (ASICs) and were reportedly linked to a US Department of Commerce investigation into Bitmain-related chip designer Sophgo. The investigation began in October when chips ordered by Sophgo in Taiwan were found in a Huawei AI processor. Huawei has been under US sanctions since 2019, though Sophgo denied having any business ties with the Chinese tech giant. Despite these issues, ASICs from other Chinese manufacturers were not affected by CBP’s actions.

Some companies faced financial strain because of the prolonged detainment. One firm even reported in November that it accumulated over $200,000 in holding fees for 200 ASICs that are still awaiting release. The CBP’s actions were reportedly carried out at the request of the US Federal Communications Commission Agency, which only added another layer of regulatory scrutiny to the situation.

(Source: Blockspace)

The release of the miners is happening during the Trump administration’s ongoing trade policies, including a 10% tariff on Chinese imports. The administration’s trade measures with Canada and Mexico are also proceeding as planned. Given that China supplies 98% of the chips used in crypto mining, the disruption in shipments posed very major concerns for the industry. Bitmain, which is the largest manufacturer of these chips, has since expanded its production into the US to mitigate future delivery issues, with hopes of strengthening partnerships in the sector.

The United States still plays a dominant role in global Bitcoin mining operations, with almost 38% of the Bitcoin network’s hashrate originating from the country. Additionally, four of the most valuable Bitcoin mining firms—MARA Holdings, Core Scientific, CleanSpark, and Riot Platforms—are based in the US. 

US Lawmakers Clash Over Crypto and National Security

In the middle of these sanctions developments, US Representative Sean Casten expressed his concerns that crypto-friendly regulations pose a national security threat. Casten made this statement during a March 5 hearing of the House Financial Services Committee, while debating the “Taiwan Conflict Deterrence Act of 2025.” 

He accused President Donald Trump and Elon Musk of weakening anti-money laundering laws and financial surveillance measures. He also argued that the proposed crypto regulations will make it nearly impossible to trace the origins of funds being transferred, and claimed that all ransomware attacks in the United States are funded by cryptocurrency. Casten even criticized his colleagues for advocating policies that will reduce oversight and make illicit financial activities easier to conduct.

Representative Casten

His comments drew a lot of criticism from pro-crypto Representative Warren Davidson, who pushed back against Casten’s stance. Davidson accused Casten of advocating for a surveillance state and argued that the US should not follow China’s example in regulating financial transactions. He urged lawmakers to uphold constitutional principles rather than expand government control over financial activities.

The debate over financial surveillance happened during broader concerns about government overreach and digital privacy. In April of 2024, former NSA contractor Edward Snowden warned that the agency was on the verge of expanding its control over the internet. He pointed to changes in Section 702 of the Foreign Intelligence Surveillance Act (FISA) and the ambiguous definition of “electronic communications surveillance provider,” which he argued could compel people working with service providers to act as government surveillance agents. Snowden has long been critical of centralized digital systems and in November 2024, he called for decentralization as a safeguard against the dangers of concentrated digital power, including artificial intelligence.

David Holtzman, a former military intelligence officer and chief strategy officer at Naoris, echoed Snowden’s warnings in December 2024. Holtzman argued that AI-driven surveillance poses an unprecedented threat to privacy and human freedom, and stated that decentralization is the only effective countermeasure against the rise of authoritarian digital control.