US Treasury Sanctions Two UK Crypto Exchanges Linked to Iran; First OFAC Exchange Designation
The US Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two UK-registered cryptocurrency exchanges, Zedcex Exchange Ltd. and Zedxion Exchange Ltd., accusing them of facilitating Iran’s financial networks and moving large volumes of crypto tied to IRGC-linked actors. OFAC says Zedcex processed more than $94 billion in transactions since its 2022 registration and that Zedxion previously listed Iranian businessman Babak Morteza Zanjani as a director. This marks the first time OFAC has designated digital-asset trading platforms under its Iran sanctions program. The action also targets Iranian officials, including Interior Minister Eskandar Momeni Kalagari, and alleges networks used crypto (notably USDT) to support the rial and evade sanctions. Treasury officials added seven TRON addresses tied to IRGC-linked wallets identified by Israeli authorities. Traders and crypto firms should expect heightened compliance risk: stronger KYC enforcement, enhanced transaction monitoring, potential delisting or frozen on‑chain flows, and amplified scrutiny of platforms and wallets interacting with sanctioned actors. Monitor liquidity and USDT/USDT-pair volumes on affected rails and prepare for short-term volatility in tokens and exchanges exposed to the flagged addresses.
Bearish
The designation is likely bearish for the tokens and platforms directly tied to the flagged addresses and rails. OFAC’s first-ever exchange designation under the Iran program increases regulatory and compliance risk across trading venues that interact with the implicated exchanges or the highlighted TRON addresses. Short-term impacts: expect liquidity withdrawal, trading halts or delistings for tokens and pairs exposed to the sanctioned flows (notably USDT pairs on affected rails), and heightened volatility as counterparties on centralized and decentralized venues reroute or freeze funds. Market makers may widen spreads; OTC desks may impose stricter due diligence. Medium-to-long-term impacts: persistent compliance costs, tighter KYC/AML controls, and possible reduction in on‑ramp/off‑ramp capacity for certain corridors could lower liquidity and increase fragmentation in affected markets. However, the broader crypto market may stabilize if firms quickly isolate implicated addresses and exchanges, and no major global settlement or additional systemic exchange designations follow. Overall, the direct price pressure will concentrate on assets and rails linked to the sanctioned entities rather than the entire market.