The United States Treasury Department has made an unprecedented move by sanctioning two UK-based cryptocurrency exchanges, Zedcex and Zedxion, for their involvement with Iran’s Islamic Revolutionary Guard Corps (IRGC). This marks the first time digital asset exchanges have been targeted for their role in Iran’s financial operations, highlighting how cryptocurrencies can be exploited to bypass international sanctions.
Historic Action Against Crypto Sanctions Evasion
The Office of Foreign Assets Control (OFAC) has flagged these exchanges for processing over $389 million in transactions tied to IRGC-linked wallets. Zedcex, which was registered in 2022, reportedly processed over $94 billion in transactions, while Zedxion formerly listed controversial businessman Babak Zanjani as its director. Zanjani, once sentenced to death for embezzling billions in oil revenues, has been accused of funneling funds into IRGC-backed projects after his early release in 2024.
Fighting Corruption and Human Rights Abuses
This bold move by OFAC doesn’t just target financial misconduct. As part of the sanctions, seven Iranian officials, including IRGC commanders in Tehran, Hamadan, Gilan, and Kermanshah provinces, have also been blacklisted. These officials are allegedly responsible for orchestrating violent crackdowns on civilian protests, leading to the deaths of hundreds, including children.
Babak Zanjani himself has been accused of laundering funds to support regime-backed projects that include essential infrastructure like railways. All properties and assets of these sanctioned entities under U.S. jurisdiction have been blocked, and U.S. persons are strictly prohibited from engaging in transactions with them.
A Step Towards Justice for the Iranian People
The Treasury’s actions align with the Biden administration’s efforts to increase pressure on the Iranian regime. According to U.S. officials, these sanctions serve as a warning and a tool to enforce accountability for human rights violations and corruption.
Secretary of the Treasury Scott Bessent emphasized, “We remain committed to supporting the Iranian people amidst oppressive regimes. This includes combating shadow banking networks and facilitating internet access during government-ordered blackouts.”
Why It Matters
This shift in strategy for sanctioning cryptocurrency exchanges demonstrates the Treasury’s deepening focus on modern tools used to evade sanctions. It also stresses the risks involved with unregulated cryptocurrencies, highlighting the need for robust compliance mechanisms for crypto platforms operating globally.
Take Precautions When Investing in Cryptocurrency
Given the evolving regulatory landscape, crypto investors must stay informed about the platforms they engage with. Reputable platforms like Coinbase provide enhanced security measures and compliance with international laws. Visit Coinbase to explore cryptocurrency investments responsibly.
