The U.S. Treasury Department sanctioned two cryptocurrency exchanges for processing funds linked to Iran's Islamic Revolutionary Guard Corps.
The action against UK-registered Zedcex Exchange and Zedxion Exchange represents OFAC's first designation of digital asset platforms for operating in Iran's financial sector.
Zedcex has processed over $94 billion in transactions since its August 2022 registration, according to Treasury documents. Both exchanges maintain connections to Babak Morteza Zanjani, an Iranian financier previously sentenced to death for embezzling billions in oil revenue before his sentence was commuted in 2024.
OFAC also designated six wallet addresses associated with the exchanges, targeting operational infrastructure alongside corporate entities. The designations follow blockchain intelligence firm TRM Labs identifying approximately $1 billion in IRGC-linked flows through the platforms, representing 56% of total transaction volume since 2023.
What Happened
Treasury designated Zedcex and Zedxion under Executive Order 13902 for operating in Iran's financial sector and Executive Order 13224 for materially assisting the IRGC. Multiple wallet addresses processed funds for IRGC-linked counterparties, with transfers conducted primarily in Tether stablecoin on the Tron blockchain.
Zedxion listed Zanjani as director when registered in May 2021. Treasury described Zanjani as "freed from imprisonment in order to launder money for the regime" and providing financial backing for IRGC-linked infrastructure projects following his 2024 sentence commutation.
TRM Labs analysis published in early January 2026 identified the exchanges as operating essentially as a single enterprise embedded within Iranian sanctions evasion networks. IRGC-linked flows peaked at 87% of total activity in 2024 before declining to approximately 48% in 2025 as non-IRGC activity increased.
The blockchain intelligence firm traced more than $10 million in Tether transfers from wallets attributable to both Zedcex and IRGC entities to addresses controlled by Sa'id Ahmad Muhammad al-Jamal, a Treasury-designated Houthi financier. These transfers occurred in late 2024 without passing through mixers or intermediary aggregation layers.
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Compliance Implications
The sanctions require U.S. persons to block all property and interests in property of the designated entities. Financial institutions risk exposure to sanctions for engaging in transactions involving the designated platforms or associated wallet addresses.
TRM Labs noted the case illustrates shifting risk patterns where sanctioned actors operate exchange-branded infrastructure offshore rather than conducting opportunistic crypto misuse.
The company emphasized that governance, ownership structure, and platform control present greater challenges than traditional transaction monitoring.
Both exchanges describe themselves as conventional crypto trading platforms on their websites, with Zedxion claiming efforts to comply with anti-money laundering regulations including customer identity verification. The UK Treasury's Office of Financial Sanctions Implementation declined to comment on the designations.
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