A small Hamburg bank has found itself embroiled in a major scandal, allegedly serving as a key financial conduit for Iranian terror activities in the Middle East.

According to a report by Politico, Varengold Bank AG has been accused of facilitating the transfer of funds to Iran's terror proxies, including Hezbollah in Lebanon and Houthi rebels in Yemen.

Western intelligence agencies have revealed that Iran utilized European banks like Varengold to launder the proceeds from illicit oil sales, enabling the regime to access hard currency for its nefarious activities while evading western sanctions.

German financial regulator Bafin initiated an investigation into Varengold last year over money laundering concerns, though the suspected links to Tehran's terror network were not initially disclosed.

Varengold has denied any wrongdoing, asserting that its dealings with Iran were strictly limited to humanitarian aid shipments such as medical supplies and food.

However, intelligence sources allege that some of the Iranian front companies utilizing Varengold's services are connected to Iran's Quds Force, a branch of the Islamic Revolutionary Guard Corps involved in training and financing terror groups across the region.

Under US sanctions targeting Iran's nuclear and missile programs, companies and banks engaging in non-humanitarian transactions with Iran face severe penalties, including exclusion from the lucrative US market and financial services.

As the investigation unfolds, Varengold's role in facilitating Iran's terror financing network may have significant implications for international efforts to curb Tehran's destabilizing activities in the Middle East.