Short Description
The U.S. Treasury sanctions two cryptocurrency exchanges for operating in Iran, marking a major escalation in using financial tools against the regime.
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1 minute, 45 seconds
Main Article
In a significant escalation of financial pressure, the U.S. Treasury Department has, for the first time, sanctioned entire cryptocurrency exchanges for operating within Iran’s financial sector. The Office of Foreign Assets Control (OFAC) targeted UK-registered platforms Zedcex and Zedxion, linking them directly to facilitating billions in transactions for the Islamic Revolutionary Guard Corps (IRGC), a U.S.-designated terrorist organization. This bold move forms part of a broader crackdown following the Iranian regime’s violent suppression of internal protests, signaling a new frontier in enforcing Iran sanctions through the digital asset space.
The sanctioned cryptocurrency exchanges are accused of processing over $94 billion since 2022 and have connections to convicted Iranian financier Babak Morteza Zanjani. OFAC alleges these platforms were key tools for moving funds to support IRGC-linked entities. This action coincides with revelations that Iran’s Central Bank purchased over $500 million of Tether’s USDT to manipulate foreign exchange markets as the national currency faltered. The use of stablecoins like USDT highlights how digital assets are being leveraged for sanctions evasion, presenting a complex challenge for global regulators.
This designation represents a strategic shift by OFAC. While it has previously blacklisted individual digital wallet addresses, this is the first instance of wielding Iran sanctions authority against entire exchange entities. The consequence is immediate: all U.S.-linked assets of Zedcex and Zedxion are frozen, and Americans are prohibited from any dealings with them. This sets a powerful precedent, putting the global cryptocurrency exchange ecosystem on notice that facilitating transactions for sanctioned states carries severe repercussions.
Short Summary
The U.S. Treasury’s unprecedented sanctions against Zedcex and Zedxion mark a major policy shift, targeting cryptocurrency exchanges for enabling Iran’s financial activities and sanctions evasion. This action, linked to massive Tether (USDT) purchases by Iran’s central bank, underscores the growing focus on digital assets in national security and highlights increased regulatory risks for exchanges operating in high-risk jurisdictions.
