OFAC Targets Crypto Platforms Tied to Iran-Linked Exchanges in Major Sanctions Crackdown
U.S. sanctions enforcers just took a sledgehammer to crypto's gray zone.
The Treasury's Office of Foreign Assets Control (OFAC) has designated a network of cryptocurrency platforms allegedly facilitating transactions for Iran-linked exchanges. This isn't a warning shot—it's a direct strike on infrastructure believed to help bypass long-standing economic sanctions.
The Mechanics of Evasion
The action targets specific platforms accused of providing material support. Think digital pipelines—services for trading, liquidity, or wallet infrastructure that keep funds moving where traditional finance can't tread. OFAC claims these networks offer a critical lifeline, converting digital assets into usable fiat or other cryptocurrencies through layered transactions.
It's a classic cat-and-mouse game, but the mouse is running on blockchain time. The platforms allegedly use obfuscation techniques common in the crypto sphere: nested exchanges, peel chains, and mixing services. The goal? To distance the origin of funds from their final destination, creating just enough plausible deniability for everyday users while serving a specific clientele.
The Ripple Effect for Crypto
This move sends a chill far beyond the targeted addresses. Major exchanges and DeFi protocols will now scramble to ensure zero touchpoints with the blacklisted entities. Compliance teams are on high alert, tracing any potential exposure. Liquidity pools might suddenly find themselves orphaned, and token projects with vague ties could face instant delisting.
For the broader industry, it's another stark reminder. The 'digital gold' narrative is fine until it collides with national security. Regulators aren't just watching; they're mapping the entire graph. Your permissionless protocol is their potential sanctions-busting tool.
Finance's New Border Patrol
The subtext is louder than the action itself. The U.S. is asserting that the crypto ecosystem, for all its decentralization claims, falls firmly within its jurisdictional reach. If you build tools that move value, you're now a de facto financial gatekeeper—whether you want to be or not.
This creates an impossible tension for crypto's purists. The very censorship-resistant features that attract some users are the red flags for regulators. It's the ultimate test of the technology's neutrality myth.
So, while traders might shrug at another OFAC list update, the architects of crypto's future are reading the fine print. The message is clear: build borders, or we'll build them for you. And in global finance, the walls just got a lot higher—even if they're made of code.
Another day, another reminder that in the high-stakes game of international finance, the house always changes the rules right when you think you've found a loophole.
OFAC designates exchanges linked to Iran’s financial operations
In the report shared by Chainalysis, Zedcex Exchange was registered in August 2022, and the exchange has reportedly processed more than $94 billion in transactions since it was established. On the other hand, Zedxion Exchange, which was registered in May 2021, initially had Iranian businessman Babak Morteza Zanjani listed as one of its directors. Both exchanges appear to be part of a network helping the country evade sanctions.
In addition, the network has also been fingered as the main avenue where funds are laundered for Iranian state interests, especially the IRGC. The connection between the exchanges and Babak Morteza Zanjani also provides another interesting angle to the OFAC action. In 2013, he was designated by the OFAC for acting as a financial facilitator for the IRGC, but was delisted under Joint Comprehensive Plan of Action (JCPOA)-related designation removals in 2016.
In 2016, Zanjani was sentenced to death in Iran for embezzling billions of dollars from Iran’s National Oil Company. However, his sentence was reduced in 2024, and by the following year, he was back as a financial backer of one of Iran’s largest railway investments. OFAC describes him as an “Iranian businessman and sanctions evader.” They claimed he was active in multiple sectors, including hospitality, transportation, technology, financial services, and oil exports.
OFAC also claimed that his connection to the designated crypto exchanges establishes a pattern of a network of operations attempting to use digital assets to evade sanctions. Speaking about the update, Secretary of the Treasury Scott Bessent noted the Iranian regime’s use of digital assets to evade sanctions. “Like rats on a sinking ship, the regime is frantically wiring funds stolen from Iranian families to banks and financial institutions around the world,” he added.
Who and what were designated by OFAC?
In its designation of Zedcex Exchange, OFAC included seven Tron addresses, which interestingly overlapped with wallets identified by Israel’s NBCTF in September 2025 as controlled by the IRGC. The OFAC action is a MOVE against a growing pattern of Iranian state actors and their affiliates using digital assets to evade sanctions and carry out illicit activities. In the past few years, OFAC has designated several individuals linked with the country involved in crypto-related sanctions evasion.
The designation of the exchanges is part of a broader action targeting Iranian officials responsible for human rights abuses. OFAC also designated six Iranian officials associated with the IRGC and Law Enforcement Forces (LEF) for their roles in the violent suppression of protesters. These individuals include Minister of Interior Eskandar Momeni Kalagari, who is in charge of the LEF and multiple IRGC commanders responsible for provinces where security officials killed protesters, including children.
The action from OFAC introduces new compliance considerations for crypto businesses globally. The designation of exchanges registered in the UK with ties to Iran shows the importance of proper know-your-customer (KYC) procedures, improved transaction monitoring, especially when dealing with exchanges with exposure to illicit wallets.
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