The U.S. Treasury Department has taken a significant step in its campaign against illicit digital finance by blacklisting Zedxion Exchange Ltd. and Zedcex Exchange Ltd., two unauthorized crypto platforms registered in London. This action, announced on January 30, 2026, marks the Office of Foreign Assets Control’s (OFAC) inaugural designation of digital asset exchanges for their role in Iran’s financial sector, signifying an escalation in sanctions enforcement aimed at disrupting cryptocurrency infrastructure that facilitates sanctions evasion. Pursuant to Executive Order 13902, addressing operations in Iran’s financial sector, and Executive Order 13224, concerning support for Iran’s Islamic Revolutionary Guard Corps (IRGC), both platforms have been accused of materially aiding illicit financial activity. The designation notably includes six high-volume wallet addresses linked directly to the exchanges, underscoring a shift toward targeting the operational wallet infrastructure rather than solely the corporate entities. This approach reflects evolving enforcement strategies in the fragmented global regulatory landscape of cryptocurrencies.
The U.S. Treasury blacklists unauthorized crypto exchanges key to Iran’s sanctions evasion, marking new enforcement frontiers.
Zedcex Exchange Ltd., established in August 2022 and operating from 71-75 Shelton Street, London, has remarkably processed over $94 billion in transactions since inception, with certain periods reflecting transaction volumes exceeding $94 million. Alongside Zedxion, registered a year earlier in May 2021 and initially listing Iranian financier Babak Morteza Zanjani as director, these entities function as UK-registered fronts leveraging digital asset mechanisms to support sanctions evasion. Importantly, multiple addresses linked to both exchanges have facilitated stablecoin flows attributable to IRGC-linked wallets, underscoring their role in channeling funds for Iran’s sanctioned paramilitary operations. OFAC also announced sanctions against seven Iranian individuals, six of whom are connected to the IRGC, highlighting coordinated efforts to target regime affiliates.
The involvement of Babak Zanjani, notorious for his extensive sanctions evasion network and financial support to IRGC projects, underscores the exchanges’ embeddedness in Iran’s broader sanctions circumvention ecosystem. His initial directorship at Zedxion and ongoing financial facilitation reflect an enduring nexus between the illicit platforms and regime-linked activities. Analytical findings from TRM Labs, corroborated by prior designations from Israel’s National Bureau for Counter Terror Financing, reinforce the exchanges’ centrality in moving substantial value tied to Iran’s sanctioned entities.
The designation also aligns with prior regulatory actions, including OFAC’s invocation of relevant executive orders emphasizing material assistance to the IRGC and Israel’s previous sanctions against these exchanges. The blacklisting serves both as a strategic warning and a foundational effort to curtail the expanding use of cryptocurrency platforms within the sanction-evasion framework, illustrating the Treasury’s adaptive enforcement approach in the evolving digital asset domain. Additionally, an Elliptic analysis has revealed that addresses linked to these exchanges have collectively transferred significant volumes of stablecoins, enabling improved blockchain transparency and ongoing financial tracing efforts.
