SANGMI CHA and JOSH SMITH IRAN has denied that it was using a South Korean ship and its crew as hostages, a day after it seized the tanker in the Gulf while pressing a demand for Seoul to release $7 billion in funds frozen under U.S. sanctions. The seizure of the MT Hankuk Chemi and its 20-member crew near the strategic Strait of Hormuz has been seen as an attempt by Tehran to assert its demands, just two weeks before President-elect Joe Biden takes office in the United States. Iran wants Biden to lift sanctions imposed by outgoing President Donald…