In a landmark enforcement action, the U.S. Department of the Treasury, through its Office of Foreign Assets Control (OFAC), has imposed sanctions on two cryptocurrency exchanges—UK-registered Zedcex and Zedxion. Announced on March 15, 2025, this historic move marks the first time OFAC has formally sanctioned cryptocurrency exchanges specifically for connections to Iran, signaling a major escalation in the global regulatory scrutiny of crypto.
The Treasury alleges these exchanges facilitated financial transactions for Iran’s Islamic Revolutionary Guard Corps (IRGC), a designated Foreign Terrorist Organization. According to OFAC's investigation, Zedcex and Zedxion processed millions of dollars originating from ransomware attacks and other illicit schemes, converting these funds into traditional fiat currency like UAE Dirhams and Turkish Lira. Blockchain analysis reportedly shows clear transaction patterns linking the exchanges to known IRGC-Quds Force wallets.
The sanctions immediately block all property and interests belonging to the exchanges within U.S. jurisdiction and prohibit any U.S. persons from conducting transactions with them. This created an immediate liquidity crisis for the platforms, with users reporting an inability to withdraw funds shortly after the announcement. The action also creates significant compliance challenges for the global crypto industry, as any entity continuing to do business with the sanctioned exchanges risks being cut off from the U.S. dollar system.
Experts view this as a pivotal shift in enforcement strategy. "This is a watershed moment," stated Dr. Elena Vargas, a former OFAC official. "By sanctioning the exchanges themselves, rather than just wallets, Treasury is attacking the choke point." The action is part of a coordinated strategy with the Department of Justice and FinCEN, following years of monitoring and increased collaboration with blockchain analytics firms like Chainalysis and Elliptic.
The long-term consequences are significant for the entire crypto sector, including enhanced compliance scrutiny worldwide, increased de-banking risk for crypto businesses, and a powerful precedent for other nations to take similar action. The news triggered brief sell-offs in privacy-focused cryptocurrencies, though major assets like Bitcoin showed resilience.
