US Treasury Secretary Scott Bessent has warned financial institutions not to fund what he calls Iran’s “shadow banking system”.

In a post on X, he said, “Iran’s shadow banking system serves as a critical financial lifeline for its armed forces, enabling activities that disrupt global trade and fuel violence across the Middle East.”

Commenting on the US Treasury Department’s imposition of sanctions on 35 Iranian entities and individuals overseeing Iran’s “shadow banking” networks, the secretary said, “Illicit funds funneled through this network support the regime’s ongoing terrorist operations, posing a direct threat to US personnel, regional allies, and the global economy.”

“Financial institutions are on notice: Any institution that facilitates or engages with these networks is at risk of severe consequences,” he added.