At the end of January 2026, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two UK-registered cryptocurrency exchanges, Zedcex and Zedxion, for allegedly processing funds on behalf of Iran’s Islamic Revolutionary Guard Corps (IRGC). Since its registration in August 2022, Zedcex has handled over $94 billion in transactions.
Sanctions Action
At the end of January 2026, the US Treasury imposed a series of sanctions targeting senior Iranian officials and their financial networks. The primary focus of these sanctions was Iran’s Interior Minister, Eskandar Momeni, who was accused of responsibility for violent crackdowns within Iran. Several senior commanders of the IRGC were also included in the sanctions.
As part of this action, the two UK-registered cryptocurrency exchanges, Zedcex and Zedxion, were added to the sanctions list. This marks the first time the US has sanctioned digital asset exchanges for activities in Iran’s economic and financial sectors.
The Role of the Exchanges
According to the US Treasury, Zedcex and Zedxion processed funds for wallets linked to the IRGC.
Blockchain analytics firm TRM Labs found that these exchanges were connected to the movement of approximately $1 billion in IRGC-related stablecoins, most of which flowed through USDT on the Tron network. While these platforms appear to be UK-registered crypto exchanges, in reality, they function more as "stablecoin clearinghouses" serving targeted sanctioned networks.
Key Individuals
The exchanges are linked to Iranian businessman Babak Morteza Zanjani. Zanjani is a complex figure in Iranian finance; in 2016, Iranian authorities sentenced him to death for embezzling $1 billion from national oil revenues. In 2024, he was released and began providing money laundering and financial services for the Iranian regime. The US Treasury stated that Zanjani was released specifically to "launder money on behalf of the regime."
Analysis shows Zanjani has longstanding ties to the broader Zedcex ecosystem, underscoring his enduring role as a financial facilitator for the Iranian state and its sanctions-evasion infrastructure.
Policy Background
In early 2026, the Trump administration adopted a series of hardline measures against Iran. Trump publicly voiced support for Iranian protesters and repeatedly threatened potential military intervention against the Iranian government.
The US Treasury stated, "The Treasury will continue to target Iranian networks and corrupt elites who enrich themselves at the expense of the Iranian people. This includes the regime’s attempts to use digital assets to evade sanctions and fund cybercriminal operations." Last week, Trump announced his administration would impose a new 25% punitive tariff on all imports from countries doing business with Iran.
Impact on the Crypto Market
Such geopolitical events often trigger short-term volatility in the cryptocurrency market. For example, according to Gate market data, as of February 2, 2026, Bitcoin was priced at $76,374.6, down 3.25% over the previous 24 hours. During the same period, the Ethereum price dropped 8.05% to $2,257.9. Bitcoin’s market capitalization currently stands at approximately $1.76 trillion, accounting for 56.29% of the total crypto market.
It’s important to note that cryptocurrency prices are influenced by a variety of factors, and the impact of a single geopolitical event is usually short-lived and limited. Historical data shows that the crypto market tends to gradually stabilize after such fluctuations.
The Importance of Compliance
This incident marks a major turning point in crypto industry regulation. The US Treasury not only sanctioned the exchange entities but also designated six high-volume wallet addresses associated with these platforms. This reflects a shift in enforcement focus: authorities are increasingly targeting platform governance, ownership, and infrastructure, rather than just tracking individual transactions after the fact.
For global exchanges like Gate, this highlights the critical importance of strengthening compliance measures and due diligence. Compliance teams must monitor not only exchange names but also broader wallet networks and liquidity infrastructure.
Industry Response
The crypto industry has responded in various ways to these sanctions. Compliance experts note that this action signals a new regulatory trend: authorities are now targeting not just individual transactions, but the underlying operational infrastructure. For everyday users and investors, this event underscores the importance of compliance when choosing a trading platform. On platforms like Gate, users can review security and compliance certifications and learn about anti-money laundering (AML) and know-your-customer (KYC) policies. As the regulatory landscape evolves, the crypto industry is striving to balance innovation with compliance. Transparency and regulatory cooperation are becoming top priorities for industry leaders.
As of February 2, 2026, Gate platform data shows Bitcoin’s market cap remains at $1.76 trillion, representing 56.29% of the total crypto market. Despite short-term price swings, the overall market structure remains stable, with Bitcoin’s all-time high still recorded at $126,080—demonstrating the resilience of crypto assets in the face of geopolitical events. This ongoing cross-border battle over financial regulation continues. As the US Treasury targets the core operational structures of crypto exchanges, every participant in the global crypto industry is reassessing their compliance frameworks and risk management strategies.
