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UK Lawmakers Highlight Urgency in Addressing Crypto-Related Sanctions Evasion

Recent investigations have unveiled serious concerns regarding the activities of two UK-registered crypto exchanges, Zedcex and Zedxion.

These platforms are reported to have facilitated nearly $1 billion in transactions linked to Iran’s Islamic Revolutionary Guard Corps (IRGC).

Blockchain intelligence firm TRM Labs indicates that an astounding 56% of the exchanges' transaction volume consisted of illicit activities, with a spike to 87% in 2024.

Operating with minimal oversight, these exchanges utilized nominal directors and virtual office addresses, complicating regulatory scrutiny.

Zedcex's connections to Babak Morteza Zanjani, a known sanctions evader, further emphasize the extent of the issue at hand.

By 2023, IRGC-affiliated transactions at Zedcex rose dramatically, constituting about 60% of the exchange's total operations.

Both Zedcex and Zedxion appeared to be functioning in tandem, despite their separate incorporation, sharing management and resources.

TRM's analysis indicated direct links to wallets sanctioned by authorities, exposing the critical role these exchanges play in evading financial sanctions.

The recent surge in illicit crypto activity, evidenced by a 162% increase linked to sanctioned entities since 2024, is alarming.

As nations like Iran and Russia increasingly utilize cryptocurrency for sanctions evasion, there is an urgent need for enhanced global regulatory cooperation.