US Treasury Targets Sanctions Evasion Network Linked to Babak Zanjani
The US Treasury has unveiled a significant sanctions-evasion operation involving Iranian oil revenue, gold-backed tokens, and cryptocurrency exchanges. On July 24, the Office of Foreign Assets Control (OFAC) designated four individuals and nine entities connected to Babak Zanjani, whose financial dealings have posed challenges for Western sanctions enforcers for over a decade. The designations specifically target Zanjani’s conglomerate, Dot One Value Creation Group, along with affiliated companies such as DotOne Gold Company and Zedpay, as well as various offshore entities that support his operations.
Notably, two digital asset exchanges, Zedcex and Zedxion, are at the center of this network, having processed over $94 billion in transactions since 2022. The January 2026 designation of these exchanges marked a pivotal moment as it was the first instance where OFAC targeted digital asset exchanges directly linked to activities of the Iranian Revolutionary Guard Corps (IRGC). This latest round of designations expands the focus to the supporting infrastructure, including financial services, gold operations, and transportation entities that facilitate these transactions.
The Tala Token, a gold-backed digital asset associated with DotOne Gold Company, was also highlighted by the Treasury, illustrating how Zanjani’s network integrates physical commodities with digital assets to create a comprehensive sanctions-evasion strategy. Zanjani is a well-known figure in sanctions enforcement, having been first designated by OFAC in 2013 for his role in facilitating substantial Iranian oil revenue transfers. Although his sanctions were briefly lifted in 2016 during the Joint Comprehensive Plan of Action (JCPOA) negotiations, they were reinstated as US policy towards Iran evolved. In 2016, an Iranian court sentenced him to death for embezzlement, a sentence that was later commuted in 2024. His redesignation by OFAC in January 2026 underscores a renewed emphasis on his activities in the digital asset space.
The designation of the Tala Token raises critical questions for investors involved in gold-backed tokens regarding the necessity of due diligence in the asset tokenization market. Being associated with a sanctions network linked to the IRGC poses reputational risks that can extend beyond individual projects. When OFAC designates entities, compliant exchanges and financial institutions must block related assets and report them. If any of the $94 billion in transaction volume has interacted with mainstream platforms, those platforms may face increased reporting obligations and potential enforcement risks.
The Treasury's actions against Zanjani and his network reflect a broader strategy to dismantle the corporate infrastructure and commodity operations that underpin financial services, gold, and transportation sectors involved in sanctions evasion.
