Short Description: The US Treasury sanctions two UK crypto exchanges linked to Iran, marking its first direct action against digital asset platforms in its Iran sanctions program.
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US Treasury Targets Crypto Exchanges in Unprecedented Move Against Iran
In a landmark escalation of its economic pressure campaign, the United States Treasury Department has imposed sanctions on two cryptocurrency exchanges for their connections to Iran’s financial system. This marks the first time Washington has directly targeted digital asset platforms as part of its ongoing Iran sanctions program, signaling a significant expansion of its regulatory reach into the crypto space. The action underscores the government’s heightened focus on denying Iran financial channels used to circumvent international restrictions.
The sanctioned entities, UK-registered Zedcex Exchange Ltd. and Zedxion Exchange Ltd., are accused of processing massive transaction volumes, reportedly over $94 billion, for entities linked to Iran’s Islamic Revolutionary Guard Corps (IRGC). The Treasury’s Office of Foreign Assets Control (OFAC) alleges the exchanges were used by an Iranian businessman, Babak Morteza Zanjani, to launder funds and support IRGC projects. This move aligns with broader efforts to crack down on those exploiting cryptocurrency exchanges and alternative payment systems to finance illicit activities and bypass traditional banking sanctions.
This development follows recent analysis indicating Iran’s central bank may have used over $500 million in the Tether (USDT) stablecoin to support its national currency, the rial, during economic turmoil. The Treasury’s action serves as a stark warning to the digital asset industry globally: platforms facilitating transactions for sanctioned nations will face severe consequences. It highlights the growing convergence of national security policy and cryptocurrency regulation, compelling exchanges to enhance their compliance and know-your-customer (KYC) protocols to avoid similar enforcement actions.
Short Summary
The US Treasury has sanctioned two UK-based crypto exchanges linked to Iran, representing its first-ever direct sanctions against digital asset platforms in this context. This action targets Iran’s use of alternative financial channels, including cryptocurrency, to evade international sanctions and fund illicit activities. It signals stricter enforcement for the crypto industry and underscores the national security risks associated with digital assets. Compliance and rigorous KYC checks are now essential for all exchanges operating internationally.
