The US Treasury’s Office of Foreign Assets Control has sanctioned eight Canada-based over-the-counter crypto money service businesses that it says helped move millions of dollars for the Iranian regime and other sanctioned actors. According to Chainalysis, the designations mark a first known OFAC action aimed at Canadian crypto and OTC providers operating within Iran’s illicit financial infrastructure.
Chainalysis said the same firms also served a wider criminal customer base, acting as liquidity providers for networks seeking to wash illicit cash through digital assets. In its analysis, the blockchain research company said the sanctioned OTCs handled funds tied not only to Iranian-linked activity but also to drug trafficking organizations, including the Ryan Wedding cartel.
Sanctions target alleged intermediaries
The action centers on eight Canadian OTC businesses that allegedly functioned as financial intermediaries for sanctioned and illicit actors. Chainalysis described these firms as a bridge for Iranian crypto holders and middlemen looking to move cryptocurrency while obscuring where the funds originated.
The company said these services advertised to Iranian users in Farsi, but were not limited to that market. It argued that the same OTC infrastructure also appealed to larger criminal organizations that needed a way to convert cash or crypto across borders.
Millions traced to sanctioned sources
Chainalysis said the scale of the flows was substantial. Its analysis found that the OTCs received more than $6 million in inflows from sanctioned jurisdictions, including about $3.7 million from sanctioned entities and roughly $2.3 million from wallets linked to terrorist-financing actors, including networks associated with Iran’s Islamic Revolutionary Guard Corps.
The report also linked the businesses to wallets connected to Iranian exchanges including Aban Tether Exchange, Nobitex, Ramzinex, and Wallex. It said the OTCs received funds from sanctioned individuals as well, naming Arash Estaki Alivand and Keyvan Fayyaz Gharen Blagh.
Overlap with drug trafficking networks
Chainalysis said the sanctioned OTCs were also used in laundering tied to drug trafficking proceeds. In its account, such groups could turn bulk cash into stablecoins using the same services that handled Iranian-linked transfers, showing how one set of intermediaries can support multiple illicit markets.
The company pointed specifically to links involving the Ryan Wedding cartel. Wedding, described in the report as a drug-trafficking figure arrested on murder and drug charges, allegedly oversaw an operation that laundered billions through Canadian money services by using a cash-to-digital-asset pipeline running through exchangers in Vancouver and Toronto.
Specific connections cited in the analysis
One of the sanctioned OTCs, Farah, was identified by Chainalysis as sending funds to intermediary wallets that later transferred assets to the Wedding cartel. The report added that two other Canada-based Farsi-language OTCs also showed additional connections to the same network.
For Chainalysis, those links illustrate a broader pattern: the same Canada-based intermediaries allegedly serviced Iranian regime interests, terrorist-financing actors, and drug trafficking organizations through overlapping payment rails and counterparties.
What the action signals
The designations extend OFAC’s focus beyond Iranian exchanges themselves to the businesses that allegedly help move funds between jurisdictions. Chainalysis said the step builds on earlier US actions against Iranian exchanges and related entities, while widening attention to the facilitators that make cross-border crypto transfers possible.
The immediate confirmed development is the OFAC designation of the eight Canadian OTCs. More broadly, the case underscores the claim made in the analysis that illicit financial networks do not operate in isolation, and that enforcement efforts are increasingly aimed at the intermediaries linking different criminal and sanctioned ecosystems.
Source: www.chainalysis.com