Key Takeaways
- The US Treasury has sanctioned Zedcex and Zedxion, the first crypto exchanges targeted under the Iran sanctions program.
- Zedcex alone is accused of processing over $94 billion in transactions since 2022, primarily for the IRGC.
- Iran’s central bank reportedly used $500M in USDT to stabilize the rial, mirroring traditional market interventions.
The United States Treasury has taken a historic step in the ongoing battle against illicit financial flows by sanctioning two UK-registered cryptocurrency exchanges. This action represents the first time the Office of Foreign Assets Control (OFAC) has directly targeted digital asset platforms for their operations within the Iranian economy.
The designated firms, Zedcex Exchange Ltd. and Zedxion Exchange Ltd., are accused of acting as vital financial lifelines for the Islamic Revolutionary Guard Corps (IRGC). This move signals a massive escalation in Washington’s efforts to close the “crypto loophole” that sanctioned regimes have used to fund their activities and bypass traditional banking restrictions.
US sanctions UK crypto exchanges over Iran links
The sheer scale of the transactions processed by these exchanges is breathtaking. According to the Treasury, Zedcex alone has handled over $94 billion in transaction volume since its registration in 2022. US officials have linked these platforms to Babak Morteza Zanjani, a high-profile Iranian businessman with a history of embezzling billions from the national oil company. After a period of imprisonment, Zanjani allegedly re-emerged as a shadow financier, utilizing these UK-registered entities to move massive sums for IRGC-linked networks.
By targeting these specific exchanges, Treasury Secretary Scott Bessent emphasized that the US will continue to hunt down the “corrupt elites” who enrich themselves at the expense of the Iranian people while facilitating state-sponsored repression and regional instability. This action also serves as a stark warning to UK-based firms that geographic distance does not offer protection from US enforcement.
Iran’s central bank used $500 million in USDt to support rial
The sanctions come on the heels of new data revealing the Iranian government’s deep reliance on stablecoins to keep its economy afloat. A recent report from blockchain analytics firm Elliptic suggests that Iran’s central bank accumulated more than $500 million in Tether (USDT) during a period of severe economic turmoil. As the Iranian rial lost nearly half its value in less than a year, the central bank reportedly used this USDT reserve on local exchanges like Nobitex to artificially prop up the domestic currency.
This “on-chain market operation” mirrors traditional central bank interventions but uses digital assets to evade the visibility of the global banking system. The Treasury’s latest designations of Zedcex and Zedxion are designed to break these digital rails, making it increasingly difficult and expensive for Tehran to settle international trade and finance its paramilitary proxies.
Final Thoughts
The Treasury is no longer just playing “whack-a-mole” with individual wallets; they are coming for the exchanges themselves. Iran’s digital escape hatch is starting to close.
Frequently Asked Questions
Which exchanges were sanctioned by the US?
Zedcex Exchange Ltd. and Zedxion Exchange Ltd., both registered in the UK, were sanctioned for Iran ties.
How much money did Zedcex process?
US officials report that Zedcex handled over $94 billion in transactions since August 2022.
Is Tether (USDT) illegal in Iran?
While not illegal, its use by the central bank to bypass sanctions has drawn the scrutiny of OFAC and blockchain investigators.
