U.S. Treasury Targets Iran‑Linked Crypto Exchanges in Historic Sanctions
Washington, Feb. 23, 2026 – For the first time, the United States Treasury’s Office of Foreign Assets Control (OFAC) has placed sanctions on digital‑asset platforms that it says enable Iran’s sanctioned financial network to bypass overseas restrictions. The move, announced on Friday, adds two UK‑registered cryptocurrency exchanges to a growing list of individuals and entities linked to the Islamic Revolutionary Guard Corps (IRGC) that are now subject to U.S. secondary sanctions.
What the Treasury announced
In a formal press release, OFAC said it designated Zedcex Exchange Ltd. and Zedxion Exchange Ltd., both incorporated in the United Kingdom, as part of its Iran sanctions program. According to the agency, the two platforms have processed a substantial volume of crypto‑related transactions on behalf of entities tied to the IRGC and other Iranian state‑linked actors. Zedcex alone is reported to have facilitated more than $94 billion in transactions since it began operating in 2022.
The sanctions also encompass two high‑profile Iranian figures:
- Eskandar Momeni Kalagari, Iran’s Minister of the Interior, who oversees the country’s Law Enforcement Forces.
- Babak Morteza Zanjani, a businessman previously convicted of embezzling billions of dollars from Iran’s national oil company. After his release, U.S. officials allege he was employed by the Iranian state to move and launder funds, providing financial support to IRGC‑linked projects.
In addition to the crypto exchanges, OFAC sanctioned senior IRGC commanders and security officials across several provinces, citing evidence of violent crackdowns on protesters and other human‑rights abuses.
Why the sanctions matter
The designation marks OFAC’s inaugural action against a digital‑asset exchange for operating within Iran’s sanctioned financial sector. Until now, U.S. sanctions against Iran have focused on banks, oil companies, and individuals, leaving the rapidly expanding crypto ecosystem largely untouched. By extending its reach to crypto platforms, Washington signals that it views digital assets as a legitimate conduit for sanctions evasion.
Treasury Secretary Scott Bessent emphasized the policy shift, stating the United States will “continue to target Iranian networks and corrupt elites that enrich themselves at the expense of the Iranian people.” He warned that Tehran’s diversion of oil revenues to weapons programs and militant proxies would face heightened scrutiny, especially when those funds are moved through crypto channels.
Broader context: Iran’s use of stablecoins
The sanctions come amid reports that Iran’s central bank has been accumulating more than $500 million worth of Tether (USDT) over the past several months. Blockchain analytics firm Elliptic traced the stablecoin purchases to the domestic exchange Nobitex, where the central bank allegedly used USDT to buy rials as a means of stabilising the national currency during a period of sharp devaluation.
These developments illustrate a growing trend: state actors are turning to stablecoins and other digital assets to conduct foreign‑exchange operations and circumvent traditional banking restrictions.
Analysis
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Compliance pressure on crypto exchanges – The designation of Zedcex and Zedxion sends a clear message to the broader crypto industry that U.S. sanctions enforcement will extend to digital‑asset platforms, even when they are domiciled outside the United States. Exchanges with any exposure to Iranian counterparties may need to tighten AML/KYC controls, enhance transaction monitoring, and consider terminating services to high‑risk users to avoid secondary sanctions.
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Potential market impact – While the immediate effect on the price of USDT or major cryptocurrencies is expected to be modest, heightened regulatory scrutiny could increase operational costs for crypto service providers. Investors may also reassess exposure to companies with significant Middle‑East trade volumes, especially those that have historically relied on crypto for cross‑border settlement.
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Geopolitical implications – By targeting crypto infrastructure, the Treasury is expanding the toolbox it can use to pressure Iran. This aligns with a broader strategy of leveraging non‑traditional financial channels—such as digital assets, shipping, and aviation—to isolate Tehran’s economy.
- Legal ramifications for U.K. entities – The sanctions on UK‑registered firms could trigger investigations by the United Kingdom’s Financial Conduct Authority and the Office of Financial Sanctions Implementation. Companies that ignore the designations may risk being barred from the U.S. financial system and face penalties under both U.S. and U.K. law.
Key takeaways
- First‑ever crypto sanctions: OFAC has designated two UK‑based cryptocurrency exchanges for facilitating transactions tied to Iran’s IRGC and sanctioned officials.
- High‑value flows: Zedcex reportedly processed over $94 billion since 2022, underscoring the scale of crypto‑enabled finance for sanctioned entities.
- Broader crackdown: The Treasury’s announcement also includes senior IRGC commanders and security officials, reflecting a comprehensive approach that couples human‑rights abuses with financial evasion.
- Stablecoin usage: Iran’s central bank has amassed over $500 million in USDT, using the stablecoin to support the collapsing rial—a sign that state actors are increasingly turning to digital assets for monetary operations.
- Industry implications: Crypto exchanges worldwide will likely face tighter compliance demands, and those with Iranian exposure may need to reassess risk‑management practices to avoid secondary sanctions.
As the U.S. continues to expand its sanctions regime into the cryptocurrency sphere, market participants should monitor regulatory updates closely and prepare for stricter oversight of cross‑border digital‑asset flows.
Source: https://cointelegraph.com/news/us-treasury-sanctions-iran-linked-crypto-exchanges-first-time?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
