U.S. Treasury Sanctions UK Crypto Exchanges for Evading Sanctions

Highlights:

• Two UK crypto exchanges aiding Iran’s financial network have been sanctioned by the US Treasury.
• Zedcex and Zedxion are alleged to have facilitated transitions for the IRGC.
• These sanctions signal stricter compliance measures for global crypto companies.

The U.S. Treasury has sanctioned two UK-registered crypto exchanges. Zedcex and Zedxion are accused of assisting Iran in evading international sanctions. The ruling marks a major milestone in global crypto enforcement, especially against state-sponsored entities that are utilizing digital assets to conduct criminal operations.

The Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury cited both exchanges as the means of conducting the transactions connected with the Islamic Revolutionary Guard Corps (IRGC) of Iran. The sanctions are the first instances where the U.S. has focused on full-fledged exchanges in the Iranian financial system. The Treasury alleges that via these platforms, billions of dollars were transferred. As a result, this facilitated the efforts of Iran to bypass financial restrictions.

The U.S. Treasury's OFAC sanctioned UK-based crypto exchanges Zedcex and Zedxion for helping Iran evade sanctions, marking the first time OFAC has targeted digital asset exchanges for involvement in Iran’s financial sector.

OFAC also designated seven Iranian individuals,…

— Wu Blockchain (@WuBlockchain) January 31, 2026

Sanctions Target Key Crypto Exchanges

Zedcex was launched in August 2022 and has since processed more than 94 billion transactions. Some of these funds were reportedly used to finance IRGC-linked networks. Blockchain analysis revealed over $389 million circulated on wallets related to the exchanges. These were usually made through Tron (TRX) addresses, which were marked because of their association with IRGC-controlled wallets.

Zedxion, the other exchange, was founded in May 2021. It is associated with Babak Morteza Zanjani, an Iranian tycoon who was previously sanctioned. Zanjani had already been sanctioned by the OFAC due to his association with the IRGC and had been convicted of looting billions of dollars from the National Oil Company in Iran. His dealings with Zedxion further highlighted the deeper network of crypto exchanges that enabled the financial operations of Iran in non-traditional systems.

U.S. Treasury Secretary Scott Bessent pointed out the scale of the U.S. sanctions on Iran. He noted, “The Iranian regime is trying to use digital resources to evade sanctions and continue to engage in illegal financial operations.” He also cautioned that the U.S. would keep on disrupting sanctions evasion with every possible tool, including virtual assets.

A Growing Challenge for UK Crypto Firms

The sanctions on Zedcex and Zedxion indicate a significant change in the global crypto sector, particularly in the UK crypto exchanges. The U.S. is sending a strong signal that being subject to the UK jurisdiction no longer provides immunity against global sanctions. The move is a precedent for more stringent regulation of financial policies on crypto platforms globally.

Cryptocurrency companies in the UK now have to reconsider their compliance policies. Increased due diligence, particularly in terms of relations to risk areas such as Iran, is important. This move by the Treasury to sanction such exchanges based on evasion of the sanctions shows the increasing significance of overall compliance strategies.

Moreover, the focus of the U.S. Treasury on digital assets as a possible means of sanctions evasion presents a new challenge to regulators. Cryptocurrencies are often seen as an alternative to traditional financial systems. Today, they have become a key tool for bypassing restrictions for sanctioned actors. With the rising number of countries adopting crypto, regulatory bodies are increasing their scrutiny of exchanges that are based in high-risk regions.

Meanwhile, in August, the U.S. Treasury sanctioned another network that was alleged to have used stolen cryptocurrency to fund a weapons program in North Korea. OFAC also identified several Russian and North Korean officials and firms that aided in laundering stolen money.

$crypto

US Treasury sanctions North Korea, Russia, China entities for crypto theft fueling weapons programs

— Byul (@byul_finance) August 27, 2025