The United States has taken a significant step in its Iran sanctions program by targeting cryptocurrency exchanges for the first time, signaling a tougher stance on the use of digital assets to bypass international restrictions. The US Treasury has sanctioned two UK-registered crypto exchanges accused of facilitating financial activity linked to Iran’s government and security apparatus, expanding Washington’s enforcement reach into the global crypto sector.
The move underscores growing concern among US officials that digital assets are being increasingly used by sanctioned states to move money, support strategic programs and evade traditional banking controls.
Washington targets crypto platforms tied to Iran
In a statement released on Friday, the Treasury Department’s Office of Foreign Assets Control said it had sanctioned Zedcex Exchange Ltd. and Zedxion Exchange Ltd., both registered in the United Kingdom. According to US authorities, the platforms are linked to Iran’s financial networks and have processed large volumes of transactions connected to entities associated with the Islamic Revolutionary Guard Corps.
OFAC said Zedcex alone has handled more than $94 billion in transactions since it was registered in 2022. US officials allege that a portion of this activity involved funds connected to sanctioned Iranian actors, making the exchange part of what they describe as the financial sector of the Iranian economy.
“This marks OFAC’s first designation of a digital asset exchange for operating in the financial sector of the Iranian economy,” the Treasury said, calling the move a warning to crypto firms that sanctions compliance applies regardless of the technology used.
Sanctions tied to Iranian officials and elites
The designations were part of a broader sanctions package aimed at Iranian officials and business figures accused of repression and corruption. Among those sanctioned was Eskandar Momeni Kalagari, Iran’s minister of the interior, who oversees the country’s Law Enforcement Forces. US officials accuse agencies under his authority of using violence and intimidation to suppress domestic dissent.
Treasury Secretary Scott Bessent said the measures reflect Washington’s intent to hold Iranian leaders accountable. “Treasury will continue to target Iranian networks and corrupt elites that enrich themselves at the expense of the Iranian people,” he said.
The sanctions also named Babak Morteza Zanjani, a high-profile Iranian businessman previously convicted of embezzling billions of dollars in oil revenue from Iran’s national oil company. According to the Treasury, Zanjani was later released from prison and subsequently used by the Iranian state to help move and launder funds.
US officials allege that Zanjani provided financial support to projects linked to the IRGC and maintained ties to the crypto exchanges now under sanctions, using them to move money outside the reach of conventional financial systems.
Focus on crypto as a sanctions evasion tool
The action highlights increasing US scrutiny of digital assets as tools for sanctions evasion. While crypto has often been promoted as a neutral technology, regulators argue that its borderless nature can be exploited by sanctioned governments and groups to move value discreetly.
Bessent accused Tehran of diverting oil revenues toward weapons development and militant proxies rather than addressing the needs of its population. He said the United States would continue to pursue networks that use digital assets to bypass restrictions and finance illicit activities.
The Treasury’s statement made clear that crypto exchanges, even those registered in allied jurisdictions, could face consequences if they are found to facilitate sanctioned activity. Industry observers say the move could prompt stricter compliance checks across global platforms, especially those serving users in high-risk regions.
Broader crackdown on IRGC-linked repression
Beyond the crypto-related designations, OFAC also sanctioned senior IRGC commanders and security officials operating across multiple Iranian provinces. The Treasury cited evidence of live-fire attacks on protesters, forced burials without funerals and widespread intimidation aimed at silencing opposition.
US officials said the measures are intended to pressure those directly involved in human rights abuses while cutting off financial channels that support such actions. By pairing human rights sanctions with financial enforcement in the crypto space, Washington appears to be linking digital asset oversight more closely with its foreign policy goals.
Iran’s use of stablecoins under the spotlight
The sanctions come amid growing attention on Iran’s use of stablecoins to manage economic pressure. Last week, blockchain analytics firm Elliptic reported that Iran’s central bank accumulated more than $500 million worth of Tether’s USDT during a period of severe economic stress.
According to Elliptic, the accumulation occurred as the Iranian rial lost roughly half its value over eight months. The firm suggested that the central bank may have used USDT to support the currency or to settle international trade, effectively mirroring traditional central bank operations through crypto channels.
Elliptic said the central bank likely acquired the stablecoins through local exchange Nobitex, using them to buy rials on the open market. The findings have intensified debate over how sanctioned states are adapting financial strategies using digital assets.
As regulators tighten oversight, the US Treasury’s latest move signals that crypto platforms are no longer seen as peripheral to sanctions enforcement. Instead, they are becoming a central focus in efforts to restrict the financial reach of sanctioned governments.
