The U.S. Treasury Department has launched a significant investigation into cryptocurrency exchanges for allegedly facilitating Iranian sanctions evasion, marking a pivotal shift in regulatory strategy from targeting individual wallets to scrutinizing the very infrastructure of digital asset platforms.
According to blockchain intelligence firm TRM Labs, the investigation centers on a case involving the exchange Zedcex, which reportedly operated on infrastructure controlled by Iran’s Islamic Revolutionary Guard Corps (IRGC). Analysis reveals staggering figures: Zedcex allegedly processed approximately $1 billion in funds linked to the IRGC. This volume represented about 56% of the exchange’s total trading activity, peaking dramatically at 87% during 2024.
This strategic pivot recognizes that combating sophisticated sanctions evasion requires targeting the financial plumbing, not just the end users. Ari Redbord, Head of Global Policy at TRM Labs, explained that evidence suggests illicit activity clusters systematically within certain exchange ecosystems. This approach aligns with broader global regulatory trends focusing on Virtual Asset Service Providers (VASPs), placing unprecedented scrutiny on exchanges' compliance programs, transaction monitoring, and KYC protocols.
The action builds on prior sanctions. In late January 2025, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on two UK-based crypto exchanges, Zedcex and Zedxion. These platforms, operating without proper authorization, were accused of aiding Iran’s evasion of international sanctions and funding the IRGC. The action targeted over $389 million in processed funds, including addresses that handled $149.3 million in a single instance.
Notably, this marks OFAC’s inaugural sanction against a digital asset exchange embedded in Iran’s financial network. Seven Iranian individuals were also designated, six with IRGC ties. Among them is Babak Zanjani, a former prisoner released to orchestrate money laundering schemes, including the Iranian central bank’s acquisition of at least $507 million in USDT stablecoins to stabilize the rial.
Experts note this investigation signals a maturation of U.S. crypto enforcement. A former OFAC official stated, “Targeting infrastructure is a force multiplier. It moves the needle from playing whack-a-mole with wallets to ensuring the entire platform complies with sanctions law.” The potential consequences for non-compliant exchanges are severe, including hefty fines, loss of banking partnerships, and exclusion from the U.S. financial system.
The implications are profound for the industry. These sanctions emphasize blockchain’s transparency as a double-edged sword—enabling traceability of illicit flows while demanding robust AML and counter-financing of terrorism (CFT) measures. Stablecoin providers and exchanges must intensify monitoring to prevent complicity. Analytics firms like TRM Labs, Chainalysis, and Elliptic have already adapted, incorporating these addresses into screening tools to help firms comply.
This environment pressures the crypto industry to professionalize rapidly. Compliance is no longer a back-office function but a core business imperative for survival. The U.S. action will likely trigger international repercussions, as global regulators often follow the lead of the U.S. Treasury and FinCEN.
