The U.S. Treasury Department has sanctioned a cryptocurrency exchange for its involvement in financial flows linked to Iran's Islamic Revolutionary Guard Corps (IRGC). This marks the first time a cryptocurrency exchange has been targeted by a specific country for financial sanctions.
The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced on the 1st (local time) that it had designated UK-registered cryptocurrency exchanges Zedcex Exchange Ltd. and Zedxion Exchange Ltd. as targets of sanctions related to Iran's financial sector. OFAC explained that it had confirmed that the two exchanges were being used to move funds and evade sanctions linked to the Iranian regime, including the IRGC.
According to OFAC, the exchanges were found to have processed wallet addresses and related transactions linked to the IRGC. During this process, the US authorities determined that a significant amount of digital asset transactions were connected to Iranian regime-linked networks. In particular, some of these transactions reportedly utilized the stablecoin Tether (USDT) and the TRON network.
Among the sanctioned exchanges, Zedcex has been confirmed to have processed hundreds of billions of dollars in cumulative transactions since its registration in 2022. The US Treasury Department stated that both exchanges likely supported the activities of Iranian financial networks.
OFAC also announced that it has sanctioned several Iranian individuals, including Babak Morteza Zanjani, an Iranian businessman convicted of embezzling Iranian state oil revenue. The Treasury Department explained that the individuals' financial activities are linked to the Iranian regime, including the IRGC.
“The Treasury will continue to disrupt attempts to exploit digital assets to evade sanctions and the networks that support them,” Treasury Secretary Scott Bessent said in a statement.
This move is seen as an example of the US response to sanctions evasion using digital assets expanding to encompass cryptocurrency exchanges in general.
