July 28, 2026 | Policy Brief
Treasury Moves Against Tehran’s Recycled Sanctions Evader
July 28, 2026 | Policy Brief
Treasury Moves Against Tehran’s Recycled Sanctions Evader
As U.S. bombs struck Iran’s military, Treasury targeted the financier who helped keep it funded.
The U.S. Treasury Department on July 24 sanctioned four individuals and nine entities sustaining the network of Iranian illicit financier Babak Zanjani, extending its penalties beyond his previously designated cryptocurrency exchanges to the offshore companies and facilitators supporting them. Zanjani built the multibillion-dollar machinery Tehran used to sell oil and move funds for the Islamic Revolutionary Guard Corps (IRGC). He then rebuilt it around digital assets and state-linked companies.
Although Tehran sentenced Zanjani to death in 2016 for withholding $2.7 billion in illicit oil revenues, it later commuted his sentence after claiming to have recovered $2.1 billion in assets, as he remained too valuable for the regime to discard. By 2025, he was back financing state projects and building new payment networks, showing that Tehran again needed the skills of the same operator who had previously moved billions for it.
Zanjani Keeps the Islamic Republic Afloat
The U.S. Treasury Department first sanctioned Zanjani in 2013 under counterproliferation authorities for having created and used illicit banking and shipping networks spanning Malaysia, the United Arab Emirates, Turkey, and Tajikistan. Through these operations, he sold tens of millions of barrels of Iranian oil and moved billions for the National Iranian Oil Company (NIOC), itself a sanctioned entity. Individual transactions included a nearly $600 million deal through a Hong Kong front, a separate oil contract worth more than $200 million, a concealed €300 million transfer, and tens of millions of dollars involving the IRGC-controlled Iran Marine Industrial Company. Treasury removed Zanjani from its sanctions lists in January 2016 pursuant to the 2015 Iran nuclear deal.
In January 2026, Treasury redesignated him under Executive Order 13902, which contained expanded economic measures against Iran, in an action that also marked its first-ever designation of an IRGC-linked digital-asset exchange. It also sanctioned his United Kingdom-registered Zedcex and Zedxion exchanges under that executive order and counterterrorism authorities due to its support of the IRGC, itself a Foreign Terrorist Organization (FTO). Zedcex had processed more than $94 billion in transactions since August 2022.
Crypto Fuels Iran’s Military and Proxy Networks
The latest sanctions target six companies in Zanjani’s Dot One conglomerate, including its rail, aviation, ride-sharing, barter, and gold subsidiaries, as well as three Turkish and Emirati firms supporting his crypto operations and four facilitators, including his sister. The designations cover DotOne Gold, which supports the allegedly gold-backed Tala Token traded through Zedcex, as well as DotOne Rail, which secured an $800 million contract with Iran’s state railway in April 2025. Treasury also sanctioned DotOne Barter, DotOne Airlines, and DotOne Trip for operating under the conglomerate controlled and financed by Zanjani.
The new designations build upon September 2025 sanctions targeting a network that facilitated more than $100 million in cryptocurrency purchases tied to Iranian oil sales from 2023 to 2025. These transactions benefited the IRGC’s Quds Force and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), which fund proxies and develop ballistic missiles and drones. Similarly, earlier actions in 2024 and 2025 targeted Hezbollah-linked digital accounts receiving proceeds from the Quds Force’s commodity sales, Hamas-affiliated exchanges transferring funds, and Houthi wallets tied to a Russian weapons-procurement network. In September 2025, the U.S. Justice Department also sought forfeiture of cryptocurrency linked to an Iranian supplier of navigation systems for the IRGC Aerospace Force’s drones and missiles.
Keep Maximum Pressure, War or No War
Sanctions remain Washington’s most important source of economic leverage denying the Islamic Republic revenue to fund its military, missile, nuclear, and terror programs. Trading them away for any short-term diplomatic agreement or a lull in fighting surrenders that advantage while giving Tehran both access to its finances and time to recover. Regardless of the status of U.S. military operations against Iran, Washington should escalate and enforce penalties pursuant to its stated policy of maximum pressure against a broad web of actors and front companies, such as those against Zanjani’s evolving networks, that are keen to help Tehran access revenue and the formal financial system.
Janatan Sayeh is a research analyst at the Foundation for Defense of Democracies (FDD). Behnam Ben Taleblu is senior director of the Iran Program and a senior fellow at FDD. For more analysis from the authors and FDD, please subscribe HERE. Follow FDD on X @FDD and @FDD_Iran. Follow Janatan and Behnam on X @JanatanSayeh and @therealBehnamBT. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.
Facts Only
* The U.S. Treasury sanctioned four individuals and nine entities sustaining Babak Zanjani's network.
* The sanctions extended beyond cryptocurrency exchanges to offshore companies and facilitators.
* Zanjani built machinery for Tehran to sell oil and move funds for the IRGC, later rebuilding it around digital assets and state-linked companies.
* Zanjani was sanctioned in 2013 for illicit banking and shipping networks across Malaysia, the UAE, Turkey, and Tajikistan.
* Transactions included a nearly $600 million deal through a Hong Kong front, an oil contract over $200 million, and transfers involving the Iran Marine Industrial Company.
* In January 2026, Zanjani was redesignated under Executive Order 13902.
* This designation included sanctions on his United Kingdom-registered Zedcex and Zedxion exchanges for supporting the IRGC.
* The new designations targeted six companies in Zanjani’s Dot One conglomerate (rail, aviation, barter, gold subsidiaries) and three Turkish/Emirati firms.
* These actions built upon sanctions targeting cryptocurrency purchases linked to Iranian oil sales from 2023 to 2025 benefiting the IRGC and MODAFL.
Executive Summary
The U.S. Treasury Department sanctioned four individuals and nine entities linked to Babak Zanjani, expanding penalties beyond previously designated cryptocurrency exchanges to include supporting offshore companies and facilitators. Zanjani is identified as the financier who established a network used by Iran to sell oil and move funds for the Islamic Revolutionary Guard Corps (IRGC), which he later rebuilt using digital assets and state-linked companies.
Zanjani was first sanctioned in 2013 for creating banking and shipping networks spanning several countries, involving the sale of Iranian oil and transfers related to entities like NIOC. In January 2026, Zanjani was redesignated under Executive Order 13902, which included sanctions against his UK-registered exchanges (Zedcex and Zedxion) due to their support of the IRGC, a designated Foreign Terrorist Organization.
Further actions targeted six companies within Zanjani’s Dot One conglomerate, including subsidiaries in rail, aviation, barter, and gold, as well as associated Turkish and Emirati firms supporting cryptocurrency operations. These designations build on prior actions targeting cryptocurrency purchases linked to Iranian oil sales from 2023 to 2025, which benefited the IRGC and related defense entities through funds derived from commodity sales.
Full Take
The mechanism described illustrates a strategic shift in targeted pressure, moving beyond direct financial flows to encompass the digital infrastructure that underpins illicit state finance. The pattern observed is the co-option of illicit financial infrastructure—specifically cryptocurrency—by actors seeking to maintain state funding streams despite conventional sanctions. This demonstrates a systemic adaptation where sanctioned figures transition from traditional smuggling routes (oil sales) to modern, decentralized methods (digital assets) to ensure regime continuity.
The implication lies in the resilience of illicit networks; when kinetic or direct asset sanctions are imposed, the underlying operational skill set and infrastructure persist by migrating across technological frontiers. The focus on Zanjani’s digital asset exchanges reflects a recognition that controlling the flow of value in the formal system is insufficient if parallel systems can be established and leveraged for state objectives. This forces an analysis of whether imposing pressure on facilitators or decentralized platforms yields sustainable results, or if the structure of illicit finance itself requires dismantling across all layers.
What questions remain are: If digital asset flows are the new conduit, how does targeting specific intermediaries affect the total volume of illicit capital? Furthermore, when sanctions target operational entities linked to state defense—such as contracts involving state railways or aerospace forces—what is the impact on the functional capacity versus the financial viability of proxy structures? Does this escalation confirm that future pressure must focus less on immediate financial flows and more on seizing control over the underlying technological and logistical systems employed by those seeking revenue?
Sentinel — Human
This analysis appears to be grounded in detailed, fact-heavy reporting, likely drawn from specialized geopolitical or financial sources, rather than generic AI synthesis.