The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned UK-registered crypto exchanges Zedcex and Zedxion, marking the first time the agency has designated digital asset platforms specifically for operating within Iran’s financial sector. The two entities are accused of processing over $94 billion in transactions since 2022, serving as a critical financial conduit for the Islamic Revolutionary Guard Corps (IRGC).
The “Sector Determination” Shift
While OFAC has previously targeted mixers (Tornado Cash) and individual wallets, this action invokes a “sector determination” authority, effectively treating these crypto exchanges as integral parts of Iran’s sanctioned financial economy. The designation freezes all U.S. assets tied to the exchanges and criminalizes any interaction with them by U.S. persons.
According to blockchain intelligence firm Chainalysis, the operation was far from a small-scale evasion scheme. Zedcex alone handled nearly $94 billion in volume since its incorporation in August 2022. OFAC also designated seven specific Tron (TRX) wallet addresses used by the exchanges to move funds.
"Like rats on a sinking ship, the regime is frantically wiring funds stolen from Iranian families to banks and financial institutions around the world," said Treasury Secretary Scott Bessent in a statement.
The Zanjani Connection
The investigation creates a direct link to Babak Morteza Zanjani, an Iranian billionaire previously sentenced to death for embezzling oil revenues. Zanjani, whose sentence was commuted in 2024, allegedly used Zedxion and Zedcex to launder funds for the IRGC shortly after his release. UK corporate filings reveal Zanjani was installed as a director of Zedxion in 2021, and Zedcex was incorporated just days after his formal exit from the former, a pattern investigators labeled as a continuity of operations.
Market Reaction
Following the designation, the native token Zedxion (ZEDX) dropped approximately 9% to trade around $0.40, with liquidity evaporating across tracking platforms. The broader implication for the market is a heightened compliance burden for exchanges handling Tron-based USDT, which was identified as a primary vehicle for these flows.
