US Sanctions on British Crypto Exchanges Trigger Market Volatility, Spotlight on USDT’s Role in Global Finance
In a landmark regulatory move, the United States has imposed unprecedented sanctions on two British cryptocurrency exchanges—Zedex and Zedxion—for allegedly facilitating over $94 billion in transactions linked to Iranian entities, including the Islamic Revolutionary Guard Corps (IRGC). This marks the first direct targeting of cryptocurrency platforms under U.S. financial pressure campaigns against Iran, signaling a new era of regulatory scrutiny for the digital asset industry. The immediate market reaction saw bitcoin plunge below $78,000, reflecting heightened investor anxiety about potential ripple effects across the cryptocurrency ecosystem. The sanctions specifically accuse Zedex and Zedxion of operating as conduits for Iranian actors to bypass traditional financial sanctions through cryptocurrency transactions. This development represents a significant escalation in how global powers are addressing the intersection of digital assets and international finance compliance. For cryptocurrency practitioners, this event underscores the growing importance of regulatory compliance and transparency in exchanges' operations, particularly concerning cross-border transactions and adherence to international sanctions regimes. From a market perspective, the sudden drop in Bitcoin's value following the announcement demonstrates cryptocurrencies' continued sensitivity to regulatory news and geopolitical events. While such volatility presents short-term challenges, it also highlights the maturing relationship between traditional financial systems and digital assets. The targeting of specific exchanges rather than cryptocurrencies themselves suggests regulators are taking a more nuanced approach, focusing on bad actors rather than the technology itself. This development has particular implications for stablecoins like USDT, which often serve as liquidity bridges in international crypto transactions. As regulatory scrutiny intensifies, exchanges and stablecoin issuers may face increased pressure to enhance their compliance frameworks, particularly regarding transaction monitoring and sanctions screening. For bullish practitioners, this regulatory clarity—though initially disruptive—could ultimately strengthen the industry's foundations by weeding out non-compliant actors and fostering greater institutional confidence in properly regulated cryptocurrency platforms. The long-term implications suggest that cryptocurrency exchanges operating in multiple jurisdictions will need to develop more robust compliance programs that address varying international regulations. This incident may accelerate the adoption of blockchain analytics tools and compliance technologies across the industry. Despite short-term market turbulence, such regulatory developments are essential steps toward cryptocurrency's integration into the global financial mainstream, potentially paving the way for more stable growth and broader adoption in the years following 2026.
U.S. Sanctions British Crypto Exchanges Linked to Iran, Shaking Markets
The United States has imposed unprecedented sanctions on two British cryptocurrency exchanges—Zedex and Zedxion—for allegedly facilitating over $94 billion in transactions tied to Iranian entities, including the Islamic Revolutionary Guard Corps (IRGC). This marks the first time crypto platforms have been targeted under U.S. financial pressure campaigns against Iran.
Bitcoin plunged below $78,000 following the announcement, with analysts warning of prolonged volatility. The MOVE escalates geopolitical tensions, as Iran threatens retaliation and regulators intensify scrutiny of stablecoins like USDT.
The Treasury Department's action signals a hardening stance on crypto's role in circumventing sanctions. Market participants now brace for Ripple effects across compliance protocols and cross-border crypto flows.
Tether Reports $10 Billion Profit, Becomes Top-20 US Treasury Holder
Tether's 2025 financial performance has shattered expectations, with the stablecoin issuer reporting $10 billion in net profits and amassing $141 billion in US Treasury exposure. The figures position the company among the world's largest holders of American government debt, rivaling sovereign wealth funds and major financial institutions.
The El Salvador-based firm now holds $122 billion in direct Treasury holdings, with total exposure surpassing $141 billion when including reverse repurchase agreements. USDT's circulating supply grew to $186 billion as demand for dollar liquidity in emerging markets and crypto trading surged throughout the year.
BDO's attestation confirms Tether maintains $6.3 billion in excess reserves, underscoring the company's financial stability. The $50 billion expansion of USDT supply in 2025—$30 billion occurring in just six months—reflects accelerating adoption of dollar-pegged stablecoins in global finance.
New York Prosecutors Criticize GENIUS Law for Failing to Curb Stablecoin Misuse
New York Attorney General Letitia James and four district attorneys have launched a scathing critique of the GENIUS law, enacted in July 2024 under the TRUMP administration. The legislation, designed to regulate payment stablecoins, is accused of providing legal loopholes for issuers while failing to protect victims of financial crimes.
Tether and Circle—two of the largest stablecoin issuers—face explosive allegations of profiting from illicit activities while maintaining selective cooperation with law enforcement. Prosecutors highlight Tether's case-by-case approach to assisting authorities as particularly problematic, given its claimed "zero tolerance" policy toward illegal transactions.
The controversy centers on the law's perceived imbalance: while offering clear protections for stablecoin issuers, it allegedly lacks robust mechanisms to prevent criminal exploitation of these digital assets. With Tether operating from El Salvador beyond direct U.S. jurisdiction, prosecutors warn of growing regulatory arbitrage in the cryptocurrency market.
