US Treasury Sanctions Iran-Linked Crypto Exchanges, Cites $94B IRGC Transactions
The US Treasury’s Office of Foreign Assets Control (OFAC) expanded Iran sanctions on January 30 to include cryptocurrency exchanges for the first time, targeting two UK-registered platforms — Zedcex Exchange Ltd. and Zedxion Exchange Ltd. — alleged to be linked to businessman Babak Morteza Zanjani. Treasury officials say Zedcex processed more than $94 billion in transactions since 2022 and routed funds to entities and wallet addresses associated with the Islamic Revolutionary Guard Corps (IRGC). OFAC also designated Iran’s interior minister Eskandar Momeni Kalagari and other individuals and organisations accused of protest repression and sanction evasion. The action is part of a broader US enforcement push that includes prior Justice Department seizures of assets tied to illicit crypto services and a wider 2025 campaign flagging hundreds of entities. Sanctions block property under US jurisdiction, create strict compliance risk for financial institutions and exchanges, and signal further enforcement against networks using digital assets to evade sanctions. Traders should note increased regulatory risk for exchanges and services linked to Iran, potential delistings or frozen flows, and higher compliance scrutiny that could reduce liquidity and increase counterparty risk for tokens routed through affected platforms.
Bearish
This action is likely bearish for assets and services directly tied to the designated exchanges and for any tokens that relied on those platforms for liquidity. OFAC’s first-ever designation of crypto exchanges linked to Iran elevates regulatory and compliance risk across on- and off-ramps, increasing the chance of exchange delistings, frozen funds, and blocked transactions. In the short term, expect volatility and selling pressure on affected tokens and any counterparties conducting business with the flagged platforms as market participants reduce exposure to sanctions risk. Medium-term effects include reduced liquidity for routes that previously used these services, higher compliance costs for exchanges and custodians, and tighter KYC/AML scrutiny that could slow flows into privacy-focused or Iran-linked markets. Long-term, the action signals more aggressive enforcement against sanction-evasion via digital assets; exchanges and traders will likely avoid counterparties perceived as risky, pushing volume to larger, regulated venues. Overall, price pressure will be concentrated on assets with significant exposure to the designated platforms or Iran-related flows, while broader market impacts depend on contagion to major venues and trading pairs.