The United States Treasury has sanctioned two cryptocurrency exchanges linked to Iran’s financial system, marking the first time Washington has directly targeted digital asset platforms under its Iran sanctions program. The move signals a significant escalation in how US authorities are addressing the use of crypto to bypass international restrictions.
The sanctions were announced Friday by the Treasury Department’s Office of Foreign Assets Control (OFAC) as part of a broader action against Iranian officials and financial networks accused of repressing citizens at home while exploiting alternative financial systems abroad.
Treasury Secretary Scott Bessent said the United States would continue to pursue “Iranian networks and corrupt elites that enrich themselves at the expense of the Iranian people,” accusing Tehran of diverting national resources toward weapons development and militant proxies rather than public welfare.
Treasury Targets Iran-Linked Crypto Exchanges and Key Officials
Among those sanctioned was Iran’s Interior Minister Eskandar Momeni Kalagari, who oversees the country’s Law Enforcement Forces. OFAC said he plays a central role in coordinating security operations linked to violent crackdowns on protesters.
The Treasury also designated Babak Morteza Zanjani, a prominent Iranian businessman previously convicted of embezzling billions of dollars in oil revenues. According to US officials, Zanjani was later released and allegedly used by the Iranian state to help move and launder funds, supporting projects tied to the Islamic Revolutionary Guard Corps (IRGC).
Breaking new ground, OFAC extended sanctions to two UK-registered cryptocurrency exchanges—Zedcex Exchange Ltd. and Zedxion Exchange Ltd. US authorities say both platforms are linked to Zanjani and have processed large transaction volumes connected to IRGC-associated entities. OFAC estimates that Zedcex alone has handled more than $94 billion in transactions since registering in 2022.
“This marks OFAC’s first designation of a digital asset exchange for operating in the financial sector of the Iranian economy,” the Treasury said, highlighting growing concern over crypto’s role in sanctions evasion.
Crypto, Sanctions Evasion, and Iran’s Use of Stablecoins
US officials argue that Iran has increasingly turned to digital assets to bypass financial restrictions and fund illicit activity. Bessent said Washington would continue targeting networks that exploit cryptocurrency to move money outside the traditional banking system.
Beyond the crypto exchanges, OFAC also sanctioned senior IRGC commanders and security officials across several provinces. The Treasury cited evidence including live-fire attacks on protesters, forced burials without funerals, and intimidation campaigns aimed at silencing dissent.
The announcement follows a recent report by blockchain analytics firm Elliptic, which said Iran’s central bank accumulated more than $500 million worth of Tether’s USDT during a period of severe economic stress. The accumulation reportedly occurred as Iran’s currency lost about half its value over eight months.
Elliptic suggested the central bank may have used USDT through a local exchange to buy rials, effectively mimicking traditional central bank market interventions using cryptocurrency. The findings have raised fresh concerns among Western policymakers about how stablecoins are being used to support sanctioned economies.
