OFAC Sanctions and Iranian Crypto Access to Exchanges: How Restrictions Block and Bypass Digital Asset Flows

Iranian users can’t trade Bitcoin or Ethereum on Binance, Coinbase, or Kraken-not because they lack the technical skills, but because OFAC sanctions make it illegal for those platforms to serve them. Since 2015, the U.S. Treasury’s Office of Foreign Assets Control has turned cryptocurrency into a frontline in economic warfare. It’s not about banning crypto itself-it’s about cutting off Iran’s ability to move money through digital assets. And the results are stark: billions in blocked transactions, exchanges shut down, and a growing underground network of workarounds that keep Iranian users connected to global markets.

How OFAC Targets Iranian Crypto Transactions

OFAC doesn’t just blacklist names. It blocks addresses. On November 28, 2018, it made history by publishing the first-ever cryptocurrency wallet addresses tied to Iranian hackers who laundered ransomware payments from the SamSam attack. These weren’t random guesses. They were real Bitcoin wallets that had received millions in ransom demands from hospitals, universities, and government agencies across the U.S. and U.K. By publishing those addresses, OFAC turned blockchain’s transparency into a weapon. Every time someone sent crypto to one of those wallets, exchanges could see it-and freeze it.

That tactic scaled. By September 2025, OFAC had targeted a $600 million shadow banking network linked to Iran’s military. The network used front companies in Hong Kong, the UAE, and China to move oil profits into crypto, then into Iranian banks. One company, Alpha Trading Co. in Hong Kong, acted as both procurement agent and financial hub. Another, Blue Sky General Trading in Dubai, used the city’s loose financial oversight to funnel cash while hiding Iranian beneficiaries. OFAC didn’t just freeze bank accounts-it froze crypto wallets. Five specific addresses were listed: two Ethereum wallets and three Tron wallets, holding Tether, Ether, and Bitcoin. These aren’t theoretical targets. They’re live, monitored, and actively blocked.

Exchanges That Got Caught

Not every exchange played by the rules. ShapeShift AG, once a major player founded by crypto pioneer Erik Vorhees, settled with OFAC in September 2025 for $750,000. Why? Because for nearly two years, it let users from Iran, Cuba, Sudan, and Syria trade over $12.5 million in crypto. ShapeShift didn’t block IP addresses. It didn’t screen wallet addresses. It treated crypto like cash-no questions asked. That’s no longer acceptable. OFAC’s message is clear: if you run an exchange, you’re responsible for knowing who you’re serving. Failure means fines, lawsuits, or worse-shutting down entirely.

ShapeShift didn’t just lose money. It lost its business. It ceased operations in 2021. But its case set a precedent. Today, every major exchange-Coinbase, Kraken, Binance-uses real-time screening tools that check every deposit and withdrawal against OFAC’s Specially Designated Nationals (SDN) list. If a wallet is flagged, the transaction is blocked. If a user logs in from Iran, they’re geo-blocked. The result? Iranian users can’t open accounts. They can’t withdraw funds. They can’t trade on the platforms most people use.

The Rise of Sanctions-Busting Exchanges

But Iranians didn’t stop trading. They just moved underground. When Garantex, a major Russian-based exchange serving Iranian clients, was raided by the U.S. Secret Service in March 2025, its operators didn’t vanish. They built Grinex. Within days, customer funds were moved to the new platform. Grinex’s own marketing materials bragged about being created to replace Garantex after sanctions hit. To regain access, users had to swap their old balances for A7A5 tokens-a ruble-backed digital asset issued by a company in Kyrgyzstan. It’s not Bitcoin. It’s not Ethereum. It’s a workaround, designed to slip through compliance filters.

Grinex isn’t an outlier. It’s a blueprint. New exchanges pop up constantly, often registered in places with no U.S. ties: Kyrgyzstan, Belarus, parts of Southeast Asia. They don’t ask for ID. They don’t verify location. They don’t care about OFAC. They make money on volume. And because they operate outside the traditional banking system, they’re nearly impossible to shut down completely. Even if one domain is taken down, the platform reappears under a new name, with new wallets, new tokens.

How Iranians Still Access Crypto

So how do Iranian users get crypto today? Three ways: peer-to-peer trading, decentralized exchanges, and privacy coins.

Peer-to-peer (P2P) platforms like LocalBitcoins and Paxful let users trade directly. An Iranian buyer finds a seller in Turkey or Pakistan. They pay in Iranian rial via bank transfer or mobile wallet. The seller sends Bitcoin to a private wallet. No exchange is involved. No compliance check. No traceable account. The trade happens off-platform, and the crypto moves into Iran’s underground economy.

Decentralized exchanges (DEXs) like Uniswap or SushiSwap don’t require sign-ups. You connect your wallet-any wallet-and swap tokens. No KYC. No location check. If you have a wallet that isn’t on OFAC’s list, you can trade freely. The problem? Liquidity. Most DEXs are dominated by U.S. and European users. Iranian traders face high slippage, low volume, and poor prices.

Then there are privacy coins. Monero, Zcash, Verge-these are designed to hide transaction details. While Bitcoin and Ethereum are public ledgers, Monero’s ring signatures and stealth addresses make it nearly impossible to trace where funds came from or where they went. Iranian actors have shifted to these coins for large transfers. OFAC can’t block what it can’t see. That’s why blockchain analytics firms now spend millions building tools to detect Monero laundering patterns-using timing analysis, cluster mapping, and AI to guess which hidden transactions belong to sanctioned entities.

The Bigger Picture: A Cat-and-Mouse Game

OFAC’s strategy works-but only up to a point. It’s stopped large-scale laundering. It’s shut down exchanges. It’s frozen hundreds of millions in crypto. But it hasn’t stopped the flow. Iran’s military and state-backed entities still get access to global markets. They just do it slower, smarter, and with more layers.

The $600 million shadow network didn’t disappear because OFAC froze a few wallets. It adapted. It moved through more intermediaries. It used more jurisdictions. It mixed crypto with physical goods-like Shenzhen Jiasibo Technology Co. shipping military components under fake labels. The system is now a hybrid: crypto for international transfers, physical trade for logistics, and cash for local payments.

Meanwhile, compliance tools keep improving. AI now scans thousands of transactions per second, looking for patterns: small transfers from multiple wallets to one central address. Repeated use of the same intermediary exchange. Sudden spikes in Monero activity after a sanctions announcement. These aren’t perfect-but they’re getting better.

And the cost? Iranian users pay it. They face higher fees. Slower transactions. Less liquidity. Fewer options. They’re forced into riskier, less secure platforms. They’re cut off from the global financial system-not because they’re bad actors, but because their country is.

What’s Next?

The next phase won’t be about blocking more wallets. It’ll be about blocking the tools that help bypass blocks. OFAC is already targeting blockchain analytics firms that help sanctions evaders. It’s pressuring cloud providers to cut off hosting for unlicensed exchanges. It’s pushing payment processors to stop processing crypto-to-fiat conversions for Iranian-linked wallets.

But as long as there’s demand-and there is-supply will follow. The real question isn’t whether Iran can access crypto. It’s whether the world can keep up. Every time OFAC shuts down one exchange, two more rise. Every time a wallet is blocked, a new one is created. Every time a privacy coin gets scrutinized, its developers make it harder to trace.

The game isn’t over. It’s just getting more complex. And for Iranian users? They’re stuck in the middle-cut off from the mainstream, but still connected, still trading, still surviving.