OFAC Sanctions Canadian Crypto OTCs for Ties to Iranian and Criminal Networks

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned eight Canadian over-the-counter (OTC) money service businesses for facilitating financial transactions on behalf of Iran’s regime and other illicit actors. This unprecedented move highlights the role of Canadian crypto OTCs in enabling Iran’s financial networks and laundering funds for global criminal enterprises.

OTCs Linked to Iranian Regime and Sanctioned Entities

OFAC’s investigation revealed that these OTCs processed millions of dollars in cryptocurrency transactions tied to Iran’s Islamic Revolutionary Guard Corps (IRGC), sanctioned Iranian exchanges, and other entities. Specifically, more than $6 million in inflows originated from sanctioned jurisdictions, with $3.7 million linked to sanctioned entities and $2.3 million connected to terrorist-financing actors, including the IRGC, Hamas, and the Houthis. Among the Iranian exchanges involved were Aban Tether Exchange, Nobitex, Ramzinex, and Wallex. The OTCs also received funds from wallets linked to sanctioned individuals such as Arash Estaki Alivand and Keyvan Fayyaz Gharen Blagh, who have ties to cyberattacks and extortion operations conducted on behalf of the IRGC.

Connections to Drug Trafficking Networks

In addition to facilitating Iranian financial activities, these OTCs were found to have supported major drug trafficking organizations. More than $6.8 million was sent to the Ryan Wedding Criminal Enterprise, a transnational drug cartel led by former Olympic snowboarder Ryan Wedding. An additional $2.5 million was transferred to other cartel-linked money laundering wallets. Wedding’s organization, which reportedly collaborated with Mexico’s Sinaloa Cartel, used these OTCs to convert bulk cash proceeds from drug sales into stablecoins such as USDT, enabling the funds to be transferred internationally. The cartel is accused of moving approximately 60 metric tons of cocaine annually and generating $1 billion in revenue.

Broader Implications of the Sanctions

This action by OFAC marks the first time Canadian crypto OTC providers have been targeted as part of Iran’s illicit financial infrastructure. The sanctioned OTCs served as intermediaries for distinct illicit economies, offering liquidity to both Iranian regime-linked actors and global criminal organizations. The sanctions underscore the growing scrutiny on crypto services that facilitate money laundering and other illicit activities, emphasizing the need for enhanced compliance and monitoring within the digital asset ecosystem.