US Cuts Crypto Exchange MEXC Off From Banks Over $16 Billion in Illicit Flows

The Financial Crimes Enforcement Network, Treasury's anti-money-laundering unit, issued an order on Friday barring US financial institutions from sending funds to or receiving funds from the Seychelles-incorporated exchange. On the same day the Office of Foreign Assets Control sanctioned eight Canadian money services businesses that it said converted Iranian rials into digital assets for the Islamic Revolutionary Guard Corps and related entities. Both actions fall under Operation Economic Outcast, the campaign against Iran's finances that Treasury launched in August.

For the crypto industry, the MEXC order is the bigger blow. Treasury describes MEXC, founded in 2018, as one of the world's top 20 exchanges, processing more than $1 billion a day as of September and holding about $5 billion in reserves. It offers trading in more than 3,000 cryptocurrencies and tokenised assets. Treasury said MEXC claims to run anti-money-laundering controls and to bar users from places such as Iran and North Korea, but that weak controls let it serve those jurisdictions anyway.

According to Treasury, between May 2021 and May 2026 MEXC handled about $1.5 billion linked to Russian sanctions evasion, including $232 million in direct transactions with entities sanctioned by the US, the EU and the UK. It said the exchange kept dealing with Garantex, the Russian exchange OFAC designated in 2022, and with its successor Grinex as recently as June 2026. Treasury also linked at least $26 million to the sanctioned A7 network, nearly $200 million to the A7A5 stablecoin, about $1 billion to direct transactions with more than 40 Iranian exchanges, and about $22 million to activity benefiting the Central Bank of Iran and the IRGC and its Qods Force.

"Financial institutions cannot have it both ways," Treasury Secretary Scott Bessent said. FinCEN issued the order under section 9714(a) of the Combating Russian Money Laundering Act. It takes effect 30 days after publication in the Federal Register, and violations can bring civil or criminal penalties. The order leaves banks' existing reporting duties and OFAC obligations unchanged.

The eight Canadian firms are based in Ontario and British Columbia and were designated under Executive Order 13902, which covers Iran's digital asset sector. They include Diverse Trade Inc, which does business as Million Exchange; Amin Exchange; Farah Exchange; Darvish Exchange; and B Galaxy Inc, which trades as Cryptoyal. Treasury said addresses tied to several of the firms traded with sanctioned Iranian exchanges such as Nobitex and Wallex, or with addresses linked to the IRGC or to terrorism. It said some of the firms had changed their names and addresses to avoid detection and were still operating.

Treasury also tied several of the businesses to Ryan Wedding, a sanctioned Canadian drug trafficker who was apprehended in January, saying they moved millions of dollars in digital assets for him. "Canada cannot be a safe haven for illicit financial facilitators that provide sanctions evasion services to the Iranian regime and its proxies," Bessent said.

The designations freeze any US assets the firms hold and bar Americans from dealing with them. Canada's financial intelligence agency, FINTRAC, said it worked with FinCEN on the action. Treasury said OFAC also coordinated with the Drug Enforcement Administration.

The Canadian designations follow OFAC actions against Iranian exchanges in June and August. On Wednesday Treasury sanctioned a network in India and Turkey that it accused of helping Iran evade restrictions on its oil exports and airlines. Last week the US said the campaign had pushed the rial to new lows and driven Iranian inflation to about 90 percent.