OFAC Sanctions BitBank: What the Zanjani IRGC Network Means for Firms
On 17 September 2026, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) designated BitBank, an Iranian digital asset exchange, along with its developer Pishtaz Simorgh Electronic Trade Company and three senior individuals connected to sanctioned Iranian financier Babak Zanjani. The designation, issued under Executive Order 13902 as part of Treasury's Operation Economic Outcast campaign against Iran, is the third US sanctions wave in 2026 targeting a network whose total IRGC-linked on-chain activity has been traced to approximately USD 1 billion. For accounting firms, auditors, and CFOs serving clients with any digital asset exposure, this action raises immediate blocked-asset obligations, secondary-sanctions risk assessments, and deeper questions about how effectively existing crypto accounting software workflows flag sanctioned counterparties.
What OFAC Actually Did on 17 September 2026
OFAC's September designation added the following parties to the Specially Designated Nationals (SDN) list:
The entities designated
- BitBank (also publicly known as BitBank3), described by Treasury as a priority digital asset venture controlled by Zanjani and used to move hundreds of millions of dollars in Bitcoin to the Islamic Revolutionary Guard Corps (IRGC) between June and July 2026.
- Pishtaz Simorgh Electronic Trade Company, the Iranian software developer behind BitBank and a subsidiary of the previously sanctioned Dot One Value Creation Group.
The individuals designated
- Mohammad Mahdi Zaker Hossein, CEO of Pishtaz Simorgh.
- Seyed Adel Heidari, vice chairman of the Dot One board.
- Hossein Ali Zaker Hossein, a Dot One executive whom OFAC identifies as central to Zanjani's sanctions-evasion activity.
OFAC also stated that the previously designated Hormuz Safe Marine Services Authority has been using BitBank since June 2026 to transfer payments it received onward to the Iranian regime, connecting the maritime sector directly to the digital asset ecosystem.
Three Waves: How the 2026 Designation Campaign Unfolded
This action does not stand alone. Understanding the full timeline is essential for any firm assessing exposure or advising clients, because each wave designates new legal entities that interact with those designated before.
January 30, 2026: the original Zedcex and Zedxion action
The first 2026 wave targeted Zanjani himself alongside Zedcex Exchange Ltd and Zedxion Exchange Ltd, two UK-registered companies that presented themselves publicly as conventional cryptocurrency exchanges. Blockchain analysis had identified approximately USD 1 billion in IRGC-linked funds flowing through these entities, representing roughly 56% of their observed transaction volume between 2023 and 2025. IRGC-linked activity peaked in 2024, when approximately USD 619 million accounted for an estimated 87% of observed activity in that year alone. OFAC described this as the first US sanctions action against digital asset exchanges specifically for supporting the IRGC. Corporate records revealed that an individual named "Babak Morteza," the name under which Zanjani appears in UK filings, had become a director and person with significant control of Zedxion, with Zedcex following shortly after his formal departure from that entity. Shared successor directors, the same UK virtual-office address, and overlapping governance timing led investigators to treat the two companies as a single operation distributed across multiple legal entities.
July 24, 2026: the commercial ecosystem
The second wave reached beyond the exchanges into the broader commercial network surrounding them: Dot One Value Creation Group, ZEDX DMCC, ZedPay, BZ Diamond, transportation companies, and associated individuals. This action signalled that Treasury was tracing control relationships and corporate infrastructure rather than treating each entity in isolation.
September 17, 2026: digital products and payment infrastructure
The third wave now captures the digital product layer: the exchange software, the developer, and the senior personnel who built and ran the financial plumbing. Combined, the three waves cover exchanges, payment platforms, commodity businesses, transportation companies, a consumer social application, a purpose-built digital asset, and an EVM-compatible blockchain network.
The Dot One Digital Ecosystem: More Than an Exchange
What distinguishes this enforcement action from a routine exchange designation is the depth and integration of the underlying ecosystem. Dot One is not simply a holding company with subsidiaries. It operates a layered digital infrastructure that connects consumer-facing products to sanctioned financial flows.
MyDot, DOTO, and the BitBank P2P loop
Dot One operates MyDot, a consumer social platform within its ecosystem. MyDot uses a rewards model: activity on the platform generates "stars," which users can convert into a purpose-built digital asset called DOTO. Dot One's social media directed users to transfer DOTO to BitBank, where it could be listed for sale on BitBank's peer-to-peer marketplace. That creates a functional closed loop connecting a consumer application, a native digital asset, and a designated exchange, all operating within a single corporate ecosystem. Zanjani has personally advertised BitBank on his social media accounts since at least 2024, and multiple companies within his wider network have publicly identified BitBank as a partner, including Pishtaz Simorgh and several Dot One entities.
Dot One Smart Chain
Dot One has also developed its own blockchain infrastructure, referred to publicly as Dot One Smart Chain. The network is EVM-compatible and uses DOTO as its native asset. It also supports Wrapped DOTO (WDOTO) and bridged representations of major digital assets including USDT and ETH. The existence of a purpose-built chain means that transactions within this ecosystem can move between assets in ways that are harder to detect through standard exchange-level screening alone, a point with direct implications for any firm whose digital asset accounting software relies primarily on exchange-reported data.
Compliance and Accounting Implications for Firms
This is the part that matters most to accounting firms, auditors, and CFOs. The layered, integrated nature of the Zanjani network creates compliance obligations that go well beyond blocking a single exchange name on a screening list.
Blocked-asset and reporting obligations under OFAC
US persons and entities under US jurisdiction are required to block any property or interest in property of a designated party and report that blocking to OFAC within 10 business days. The SDN additions from 17 September trigger that clock immediately. Firms must screen not just wallet addresses but also entity names, aliases, and any known counterparty identifiers across the full designation list. Given that the Zanjani network has operated under multiple names across multiple jurisdictions, that screening must be thorough. Standard name-matching alone is insufficient.
Secondary sanctions exposure
Non-US firms and their clients are not automatically exempt. Executive Order 13902, under which these designations were issued, carries secondary-sanctions authority, meaning that non-US counterparties who engage in significant transactions with designated parties risk being cut off from the US financial system. Any client whose books show transactions with BitBank, Pishtaz Simorgh, ZEDX DMCC, ZedPay, Zedcex, or Zedxion warrants a file review regardless of whether that client is a US person.
What crypto bookkeeping software workflows must capture
The enforcement pattern here illustrates a limitation that firms using any crypto bookkeeping software should address directly. When a sanctioned network operates across an exchange, a payment platform, a consumer app, a proprietary digital asset, and a custom blockchain, transaction-level screening against a single wallet or exchange name will miss connections that exist at the corporate and governance level. Firms should ensure their compliance stack combines on-chain analytics with entity-level due diligence and corporate registry checks. The accounting record needs to reflect not just "what asset moved where" but "who controls the counterparty." For context on how similar on-chain behavioral patterns have been used to flag suspect wallets in other enforcement contexts, see our earlier analysis of pig-butchering behavioral detection and AML implications for digital asset accountants.
Audit documentation and file defensibility
Firms conducting audits or preparing financial statements for clients with digital asset holdings should document their sanctions screening process explicitly. Given that OFAC has now issued three waves of designations against a single network within nine months, demonstrating that your screening was current as of each audit period matters. If a client's digital asset transactions touched any part of the Zanjani ecosystem in 2024 or 2025 (the period of peak IRGC-linked activity through Zedcex and Zedxion), that warrants a specific disclosure assessment. For additional context on how Iran-related digital asset enforcement has been evolving across agencies, our coverage of what the Binance DOJ Iran sanctions probe means for accounting firms provides a useful parallel.
The Investigative Methodology: Why It Matters for Professional Practice
The TRM Labs investigation that preceded these designations illustrates an approach that compliance professionals can learn from directly. The key finding is that sophisticated sanctions-evasion networks are best understood by tracing people, infrastructure, and control relationships rather than examining individual wallet addresses or exchange names in isolation.
Following corporate infrastructure, not just blockchain transactions
TRM's work began on-chain with IRGC-linked transaction flows, but it expanded into corporate registries, shared addresses, succession of directorships, and the timing of company incorporations. The overlapping UK filings for Zedcex and Zedxion would not have been visible from blockchain data alone. The connection between Dot One Smart Chain, MyDot, DOTO, and BitBank would not have been apparent from wallet screening alone. For accounting firms, this means that AML and sanctions risk assessments for digital asset clients should include corporate-registry checks in relevant jurisdictions, not just on-chain transaction analysis.
The value of entity-relationship mapping in digital asset engagements
When a client holds or transacts in assets on an EVM-compatible chain, knowing that the chain itself was developed by a sanctioned entity changes the risk picture entirely. Firms should ask not just "what exchange did this transaction pass through?" but "who operates the infrastructure this transaction relied on?" That question is now a live compliance obligation, not a theoretical one.
Frequently Asked Questions
What does OFAC's BitBank designation mean for a US accounting firm right now?
Any US person or firm under US jurisdiction must immediately block and freeze any property connected to the newly designated parties and report that blocking to OFAC within 10 business days. Firms should run the full 17 September 2026 SDN additions against their client and counterparty lists, document the screening, and escalate any matches to legal counsel before taking further action on affected accounts or transactions.
Does this affect non-US firms or clients?
Yes, potentially. The designations were issued under Executive Order 13902, which carries secondary-sanctions authority. Non-US entities that conduct significant transactions with designated parties risk being cut off from the US financial system. Any client, regardless of jurisdiction, who has transacted with BitBank, Zedcex, Zedxion, Pishtaz Simorgh, ZedPay, or related entities warrants a file review.
How far back should a firm look when reviewing client transaction history?
OFAC's own analysis found that IRGC-linked activity through Zedcex and Zedxion ran from 2023 through 2025, with peak activity in 2024. Any client with digital asset transaction history during that window and any counterparty exposure to those exchanges or related entities should be reviewed. The January 2026 Zedcex and Zedxion designations already created retrospective relevance for that period.
What are the accounting treatment implications if a client holds DOTO or assets on Dot One Smart Chain?
Assets held on an infrastructure network whose developer (Pishtaz Simorgh) is now on the SDN list, or whose native asset (DOTO) is connected to designated parties, present a blocked-asset accounting issue. Those assets cannot be transacted with or transferred until OFAC authorises otherwise. On the balance sheet, they should be reclassified and disclosed as blocked assets. The fair value measurement may also need adjustment given the near-total illiquidity created by the designation.
What steps should firms take now if existing digital asset accounting software does not screen against OFAC's SDN list automatically?
Firms should treat any gap in automated SDN screening as a priority remediation item. In the interim, a manual check of the full 17 September 2026 SDN additions against client and counterparty records is the minimum required step. Longer term, any digital asset accounting or bookkeeping workflow that does not integrate real-time sanctions screening represents a compliance control gap that auditors and regulators will increasingly flag as inadequate given the volume and pace of enforcement actions in 2026.
Source: TRM Labs