OFAC Targets UK Crypto Exchanges for Ties to Iran’s IRGC and Sanctions Evasion

U.S. Sanctions Hit UK Crypto Exchanges Linked to Iran’s IRGC

January 30, 2026 — In a significant move, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated two UK-registered cryptocurrency exchanges, Zedcex Exchange Ltd. and Zedxion Exchange Ltd., for their involvement in Iran’s financial sector and their processing of cryptocurrency transactions for the Islamic Revolutionary Guard Corps (IRGC). This marks the first time OFAC has specifically targeted digital asset exchanges operating within Iran’s financial framework.

Major Transactions and Connections

Zedcex, which began operations in August 2022, has reportedly processed over $94 billion in transactions, raising eyebrows about its role in facilitating financial activities for the IRGC. Zedxion, established in May 2021, was initially linked to Iranian businessman Babak Morteza Zanjani, a controversial figure previously sentenced to death for embezzling billions from Iran’s National Oil Company.

According to OFAC, both exchanges are part of a broader network that appears to facilitate sanctions evasion and money laundering for Iranian state interests. Secretary of the Treasury Scott Bessent emphasized the Iranian regime’s exploitation of digital assets, stating, “This includes the regime’s attempts to exploit digital assets to evade sanctions and finance cybercriminal operations.”

Babak Morteza Zanjani: A Notorious Figure

Zanjani’s connection to these exchanges adds a complex layer to the situation. Initially designated by OFAC in 2013 for his financial ties to the IRGC, he was delisted in 2016 but later faced a death sentence for embezzlement. His sentence was commuted in 2024, and he resurfaced as a financial backer for major infrastructure projects in Iran.

OFAC describes Zanjani as an “Iranian businessman and sanctions evader” involved in various sectors, including hospitality and oil exports. His ties to the designated exchanges suggest a sophisticated operation leveraging digital assets for sanctions evasion.

On-Chain Activity and Compliance Implications

The designation includes seven Tron (TRX) addresses linked to Zedcex, some of which overlap with wallets identified by Israel’s National Bureau for Counter Terror Financing (NBCTF) as controlled by the IRGC. This highlights the intricate web of financial transactions that may support illicit activities.

The recent sanctions introduce new compliance challenges for cryptocurrency businesses globally. The designation of UK-registered entities with ties to Iran underscores the necessity for robust know-your-customer (KYC) procedures and enhanced transaction monitoring.

A Broader Strategy Against Iranian Officials

This action is part of a wider strategy targeting Iranian officials responsible for human rights abuses. Alongside the exchange designations, OFAC also sanctioned six Iranian officials linked to the IRGC and Law Enforcement Forces (LEF) for their roles in violently repressing protests.

As the Iranian regime increasingly turns to cryptocurrencies to evade sanctions, the implications of these designations extend beyond the exchanges themselves, impacting the global cryptocurrency landscape and compliance practices.

Conclusion

The U.S. government’s decisive action against Zedcex and Zedxion underscores the growing scrutiny of cryptocurrency exchanges and their potential role in facilitating illicit activities. As the landscape evolves, businesses must remain vigilant in their compliance efforts to navigate the complexities of international sanctions and financial regulations.