US Sanctions UK Crypto Exchanges Over Iran Ties

The U.S. Treasury has taken a landmark step in its economic pressure campaign against Iran, sanctioning two UK-registered cryptocurrency exchanges for the first time. The move marks a significant expansion of Washington's sanctions program, directly targeting digital asset platforms believed to be part of Iran's alternative financial infrastructure.

According to a statement from the Treasury Department's Office of Foreign Assets Control (OFAC), the action is part of a broader crackdown on Iranian officials and networks. These groups are accused of violently suppressing domestic dissent while simultaneously using unconventional financial channels to circumvent international sanctions.

Crypto Platforms Linked to Illicit Finance

The sanctions specifically name two UK-based exchanges: Zedcex Exchange Ltd. and Zedxion Exchange Ltd. U.S. officials allege these platforms are connected to Babak Morteza Zanjani, a prominent Iranian businessman previously convicted for embezzling oil revenue.

The Treasury claims Zanjani was released from prison and later used by the Iranian state to move and launder funds, providing financial support for projects tied to the Islamic Revolutionary Guard Corps (IRGC).

The scale of the activity is substantial. OFAC reported that Zedcex alone has processed more than $94 billion in transactions since its registration 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 stated.

A Wider Crackdown on Iranian Officials

The designation of the crypto exchanges was part of a comprehensive sanctions package targeting key figures within Iran's regime. Among those sanctioned is Eskandar Momeni Kalagari, Iran's minister of the interior, whose role includes overseeing the country's Law Enforcement Forces.

OFAC also sanctioned senior IRGC commanders and security officials in multiple provinces, citing evidence of lethal force against protesters and widespread intimidation campaigns.

Treasury Secretary Scott Bessent accused Tehran of diverting oil revenues to weapons programs and militant proxies instead of supporting its citizens. "Treasury will continue to target Iranian networks and corrupt elites that enrich themselves at the expense of the Iranian people," Bessent said, adding that the U.S. will pursue networks that use digital assets to finance illicit activity.

Iran's Growing Use of Digital Currency

The sanctions come as evidence mounts of Iran's strategic use of cryptocurrencies to navigate economic challenges.

A recent report from blockchain analytics firm Elliptic revealed that Iran's central bank acquired over $500 million in Tether (USDT). This accumulation occurred as the Iranian rial lost approximately half its value over eight months. Elliptic suggests the central bank likely used the USDT on the local exchange Nobitex to purchase rials, mirroring a traditional central bank intervention but executed through crypto markets. The stablecoins may have also been used to settle international trade.