Washington sanctions UK crypto exchanges tied to Iran finance

Treasury’s Office of Foreign Assets Control also designated Iranian businessman Babak Morteza Zanjani in the same action, alleging the exchanges had connections to him and that multiple addresses attributed to the platforms handled flows for IRGC-linked wallets. Treasury said Zedcex has processed more than $94 billion in transactions since registering in August 2022, while Zedxion was registered in May 2021 and initially listed Zanjani as its director.

The sanctions cite two authorities with different hooks. Treasury said the exchanges were designated under Executive Order 13902 for operating in Iran’s financial sector, and also under Executive Order 13224, as amended, for materially assisting or providing support to the IRGC.

The practical effect is blocking: any property or interests in property of the designated parties that come into US jurisdiction, or into the possession or control of US persons, must be frozen and reported to OFAC. OFAC describes “blocking” as an across-the-board prohibition on transfers or dealings of any kind with respect to the blocked property.

Treasury also reiterated OFAC’s “50% rule,” under which entities owned 50% or more in the aggregate, directly or indirectly, by one or more blocked persons are themselves treated as blocked even if not separately named. OFAC guidance also warns that transactions involving a blocked person are generally prohibited absent authorization, even if the blocked person is acting on behalf of a non-blocked entity.

Zanjani has appeared in prior Treasury actions tied to Iran sanctions evasion networks. In 2013, Treasury announced designations targeting Zanjani and an associated network for moving billions of dollars on behalf of the Iranian regime, including payments tied to an IRGC company.

Treasury bundled the exchange designations into a broader Iran-related package that also named Iranian officials, describing the measures as part of efforts to disrupt networks it says use digital assets and financial infrastructure to evade sanctions and support IRGC-linked activity.