The U.S. Treasury has taken a decisive step into crypto enforcement, sanctioning two UK-registered exchanges for allegedly helping Iran evade long-standing U.S. sanctions. The Office of Foreign Assets Control (OFAC) targeted Zedcex and Zedxion, accusing them of facilitating large-scale financial flows tied to Iran’s Islamic Revolutionary Guard Corps (IRGC). The move marks a major shift in how regulators are treating crypto platforms linked to sanctioned economies.
Exchanges Accused of Handling IRGC-Linked Funds
According to the Treasury, Zedcex processed more than $94 billion in transactions since August 2022, with a portion allegedly connected to IRGC-linked networks. Blockchain analysis also pointed to more than $389 million moving through wallets tied to the case. OFAC specifically designated seven Tron (TRX) addresses used to route these funds, aiming to cut off future access.
The exchanges were reportedly connected to Babak Zanjani, a controversial Iranian financier previously imprisoned for misappropriating billions in oil revenues. U.S. officials claim Zanjani later reemerged as a key figure helping the Iranian regime move money discreetly, using crypto infrastructure to bypass traditional banking restrictions.
Individuals and Security Officials Also Sanctioned
Beyond the exchanges, OFAC sanctioned seven Iranian individuals, including senior security and intelligence officials. Authorities accused them of enabling money laundering and supporting internal repression. The Treasury emphasized that crypto tools made it easier for these networks to obscure fund flows, which is why entire platforms, rather than just individual wallets, were targeted.
As a result of the sanctions, U.S. persons are prohibited from engaging with Zedcex and Zedxion, and any assets linked to them under U.S. jurisdiction are now frozen.
A Turning Point for Crypto Enforcement
This action sets a new precedent. Until now, OFAC has largely focused on sanctioning wallets or specific actors. Targeting full-fledged exchanges for operating within Iran’s financial system signals a tougher stance. The message to global crypto platforms is clear: weak compliance and jurisdictional blind spots carry serious consequences.
Treasury officials said Iran has increasingly turned to digital assets to ease economic pressure from sanctions. By shutting down crypto rails linked to the country, the U.S. hopes to raise the cost and complexity of these efforts.
What This Means for Crypto
The sanctions send a clear warning to the UK crypto industry that regulatory distance is no longer a shield. Even though Zedcex and Zedxion are UK-registered entities, OFAC’s action shows that exchanges operating under the UK banner can still face severe consequences if they are found facilitating sanctioned financial activity. For UK-based crypto firms, this raises the compliance bar significantly.
The move also increases pressure on UK regulators to tighten oversight of registered crypto businesses, as failures could attract international enforcement rather than remaining a local compliance issue. In effect, the sanctions reinforce that UK crypto platforms are being treated as part of the global financial system, not a regulatory loophole, and missteps can quickly escalate into cross-border enforcement actions with serious operational and reputational fallout.
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FAQs
The Treasury sanctioned Zedcex and Zedxion for allegedly processing billions in transactions to help Iran, specifically its Revolutionary Guard, evade U.S. sanctions using cryptocurrency.
This marks a shift from targeting individual wallets to sanctioning entire exchanges, signaling a tougher stance on platforms that operate in sanctioned economies or have weak compliance.
Yes. It raises compliance expectations and signals that UK registration won’t shield firms from U.S. enforcement if sanctions laws are violated.
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