Why the Treasury Took Action
The United States Treasury has imposed sanctions on two cryptocurrency exchanges tied to Iran’s financial system, marking the first time Washington has directly targeted digital asset platforms under its Iran sanctions framework. The move reflects growing concern that crypto infrastructure is being used to bypass long-standing restrictions on Iran’s access to global finance.
In a statement released Friday, the Treasury Department’s Office of Foreign Assets Control said the designations form part of a broader action against Iranian officials and financial networks accused of suppressing domestic dissent while relying on alternative channels to move money internationally.
Among those sanctioned was Iran’s interior minister Eskandar Momeni Kalagari, who oversees the country’s Law Enforcement Forces. Treasury Secretary Scott Bessent said the measures are aimed at officials and networks that profit while ordinary Iranians face economic hardship. “Treasury will continue to target Iranian networks and corrupt elites that enrich themselves at the expense of the Iranian people,” he said.
Investor Takeaway
Crypto Exchanges Drawn Directly Into Iran Sanctions
The action breaks new ground by extending US sanctions to two UK-registered crypto exchanges, Zedcex Exchange Ltd. and Zedxion Exchange Ltd. US officials say both platforms are linked to Babak Morteza Zanjani, a 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 relied on by Iranian authorities to move and launder funds. OFAC said the networks tied to him provided financial support to projects connected to the Islamic Revolutionary Guard Corps.
OFAC said Zedcex alone has processed more than $94 billion in transactions since registering in 2022, with a substantial share linked to entities connected to the IRGC. “This marks OFAC’s first designation of a digital asset exchange for operating in the financial sector of the Iranian economy,” the Treasury said.
By targeting exchanges rather than individual wallets or addresses, the United States is expanding its enforcement toolkit to include market infrastructure that facilitates large-scale transaction flows.
Broader Enforcement Beyond Digital Assets
The crypto-related designations were part of a wider sanctions package that also covered senior IRGC commanders and security officials across several provinces. OFAC cited evidence including live-fire attacks on protesters, intimidation campaigns, and forced burials without funerals as part of a broader crackdown on dissent.
Bessent accused Iranian authorities of diverting oil revenues toward weapons programs and militant proxies rather than supporting the population. He said the United States would continue to target networks that use digital assets to bypass restrictions and fund prohibited activities.
The inclusion of crypto platforms alongside military and security officials reflects a view in Washington that digital asset infrastructure has become embedded in Iran’s sanctioned economy rather than operating at its margins.
Investor Takeaway
Stablecoins Add Pressure to the Policy Debate
The sanctions come as scrutiny intensifies around Iran’s use of stablecoins during periods of financial stress. Last week, blockchain analytics firm Elliptic reported that Iran’s central bank accumulated more than $500 million in Tether’s USDT during a period when the rial lost roughly half its value in eight months.
Elliptic said the accumulation likely involved purchases through a local exchange, with USDT used to buy rials in a pattern that mirrors traditional central bank intervention, but executed through crypto rails rather than the banking system.
