U.S. Sanctions Target Iran-Linked Crypto Exchanges In First Move

(MENAFN- The Arabian Post)

Washington has imposed sanctions on a network of cryptocurrency exchanges and facilitators tied to Iran, marking the first time the United States has directly targeted crypto trading platforms over allegations of supporting the Islamic Revolutionary Guard Corps. The measures signal a widening of financial enforcement into the digital asset space as Washington seeks to curb Iran's access to global capital flows.

The sanctions, announced by the Treasury Department, focus on several exchanges accused of processing transactions that benefited entities connected to the IRGC, which the United States designates as a foreign terrorist organisation. Officials said the platforms helped move funds across borders while masking their origin, allowing sanctioned actors to bypass conventional banking restrictions.

According to Treasury officials, the exchanges were part of a broader financial web linked to an Iranian businessman who was convicted in Iran on embezzlement charges and whose overseas commercial interests have long been under scrutiny by Western authorities. Investigators allege that companies under his influence used crypto platforms to convert rial-denominated proceeds into digital assets, which were then routed through multiple wallets before being cashed out abroad.

The action represents a notable escalation in how Washington applies sanctions to the crypto sector. Until now, enforcement has largely focused on mixers, wallet services or individuals accused of laundering funds. By targeting exchanges themselves, the United States is signalling that platforms facilitating trading can be held accountable if they are found to be knowingly enabling sanctioned entities.

Treasury officials said the sanctioned exchanges failed to implement adequate controls to prevent illicit use of their services. They were accused of ignoring red flags linked to large-volume transfers associated with IRGC-linked commercial fronts, including energy, construction and logistics firms that have faced restrictions for years.

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Under the sanctions, any assets of the designated entities within U. S. jurisdiction are frozen, and U. S. persons are barred from conducting transactions with them. Foreign firms that continue to deal with the listed exchanges also risk secondary sanctions, a step that could sharply limit the platforms' ability to operate internationally.

The move reflects growing concern within U. S. security agencies that digital assets are increasingly being used by sanctioned states to offset isolation from the global financial system. While crypto markets remain volatile and fragmented, officials argue they offer Iran and similar actors an alternative channel for trade settlement, remittances and procurement.

Iran has repeatedly denied using cryptocurrencies to evade sanctions, though domestic regulations have evolved to allow tightly controlled crypto mining and limited trading. Analysts note that energy subsidies have made mining attractive within the country, creating a domestic supply of digital assets that can be deployed for external payments.

The sanctions also underscore Washington's broader effort to close loopholes in its sanctions architecture. Senior officials have acknowledged that while crypto transactions still account for a small share of illicit finance compared with traditional methods, their cross-border speed and pseudonymous nature pose distinct challenges.

Industry reaction has been cautious. Compliance specialists say the designation of exchanges, rather than ancillary services, raises the stakes for platforms operating in jurisdictions with weak oversight. Many global exchanges have already tightened know-your-customer and transaction-monitoring systems in response to earlier enforcement actions involving other sanctioned jurisdictions.

Legal experts point out that the U. S. move could accelerate regulatory convergence, as allied governments face pressure to align their own approaches to crypto oversight. European regulators have been rolling out stricter frameworks for digital asset service providers, while several Asian financial hubs have strengthened licensing regimes following high-profile collapses and fraud cases.

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For Iran, the impact may be mixed. While the targeted exchanges are expected to lose access to major liquidity pools and counterparties, enforcement officials concede that determined actors can migrate to alternative platforms or decentralised protocols. Still, they argue that each enforcement action raises costs and complexity, limiting scale and efficiency.

Arabian Post – Crypto News Network

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