On August 7, OFAC announced sanctions against Iranian-linked digital asset exchanges and related facilitators for allegedly enabling sanctions evasion and illicit cryptocurrency activity for the Iranian regime. According to OFAC, the digital asset exchanges allegedly facilitated the Iranian regime’s laundering of billions of dollars while supporting the IRGC and “other terrorist groups,” including through an online gambling enterprise and “sprawling corporate networks” that obscured funds’ origins and laundered proceeds to the IRGC and other “regime-connected individuals.”

The sanctions target two major digital asset exchanges, the leader of what OFAC referred to as a “network of front companies operating across multiple jurisdictions,” and several related companies. OFAC designated the network leader pursuant to Executive Order 13224, as amended, for materially assisting or providing support to the IRGC and a previously designated Iranian digital asset exchange, and designated several companies in his network under the same order for being owned, controlled or directed by, or acting on behalf of, designated persons. Specifically, OFAC alleged that the actors exploited unlicensed or lightly regulated digital currency exchanges to evade sanctions and facilitate illicit cryptocurrency activity. Further, OFAC designated another Iran-based digital asset exchange for sanctions pursuant to Executive Order 13902 “for operating in the financial sector of the Iranian economy.” The release also notes that the sanctions build on the White House’s “sustained sanctions campaign” against Iran under National Security Presidential Memorandum 2. As a result of the sanctions, all property and interests in property of the designated persons that are in the U.S. or in the possession or control of U.S. persons are blocked, as are entities in which one or more blocked persons collectively hold a direct or indirect ownership interest of 50 percent or more.