US Treasury Sanctions UK Crypto Exchanges Over Iran

US extends Iran sanctions to UK-registered crypto platforms

The US Treasury has for the first time targeted cryptocurrency exchanges in its Iran sanctions campaign, designating two UK-registered platforms and multiple Iranian officials and networks. The Office of Foreign Assets Control (OFAC) announced the move as part of a broader effort to disrupt schemes that use digital assets and alternative financial channels to evade international restrictions.

Which exchanges were sanctioned and why

OFAC named Zedcex Exchange Ltd. and Zedxion Exchange Ltd., both registered in the United Kingdom, as entities tied to Iran’s financial apparatus. US authorities allege the exchanges processed significant volumes of transactions connected to Islamic Revolutionary Guard Corps (IRGC)-linked entities. According to the Treasury, Zedcex alone has handled more than $94 billion in transaction volume since its 2022 registration—an assertion that highlights growing concerns about how crypto exchanges may be leveraged to move sanctioned funds.

Individuals and networks on the list

The sanctions target high-level Iranian actors, including Eskandar Momeni Kalagari, Iran's interior minister who oversees the Law Enforcement Forces, and Babak Morteza Zanjani, a businessman once convicted of large-scale embezzlement. OFAC says Zanjani was later used by the state to move and launder funds, providing financial support for projects tied to the IRGC. The Treasury emphasized that it will continue to pursue corrupt elites and networks diverting resources away from the Iranian population.

Why this matters for crypto compliance and global markets

This designation marks a milestone: OFAC’s first direct naming of digital asset exchanges for facilitating activity in Iran’s financial sector. It signals increased regulatory focus on crypto compliance, countering illicit finance, and the need for exchanges to strengthen Know Your Customer (KYC) and transaction monitoring to avoid secondary sanctions risk. The move can have ripple effects across global crypto markets, pushing compliant platforms to tighten onboarding and transaction screening for IRGC exposure and sanctioned counterparties.

Stablecoins, central banks, and on-chain responses

Separately, blockchain analytics firm Elliptic reported that Iran’s central bank amassed more than $500 million in Tether USDt during a period of serious economic stress. Analysts say the central bank may have used USDT to support the collapsing rial or to settle trade—buying rials on local crypto platforms such as Nobitex. That activity underscores how stablecoins and decentralized finance tools can intersect with traditional monetary policy during crises, raising questions about transparency and on-chain traceability.

Next steps and implications for the crypto ecosystem

Market participants should expect heightened enforcement and closer scrutiny of cross-border crypto flows tied to sanctioned jurisdictions. Exchanges, custodians, and institutional traders will need robust blockchain analytics, transaction screening, and sanctions compliance programs to mitigate exposure. For policy watchers, the designations also show regulators are willing to use digital-asset-specific tools to enforce national security and foreign policy goals.

As OFAC continues to adapt its approach to on-chain finance, the crypto industry faces a clear signal: regulatory compliance and transparent transaction monitoring are no longer optional for platforms operating at scale or across borders.

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