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Treasury bars MEXC from US system over $16 billion in illicit finance
The U.S.
Treasury Department's Financial Crimes Enforcement Network (FinCEN) has issued an order that effectively severs the crypto exchange MEXC Global from the American financial infrastructure, citing evidence of at least $16 billion in transactions connected to illicit operations.
This directive, which is a component of the Treasury's Operation Economic Outcast, prevents U.S. financial entities from conducting any transfers to or from MEXC. The rationale provided by the Treasury is that the exchange enabled financial movements tied to sanctions evasion involving Iran, Russia, and North Korea, alongside cybercrime and other unlawful endeavors.
Between May 2021 and May 2026, the exchange reportedly handled a minimum of $16 billion in transactions linked to illicit finance. Among these, nearly $1.5 billion was associated with evading sanctions imposed by Russia. Furthermore, the Treasury noted that $232 million of this activity involved direct dealings with entities that are subject to sanctions from the US, the European Union, and the United Kingdom.
The exchange continued processing transactions involving the sanctioned Russian exchange Garantex and its successor, Grinex, as recently as June 2026, even though Garantex was sanctioned back in April 2022. In addition, the Treasury stated that MEXC facilitated at least $26 million in transactions benefiting the sanctioned A7 network, and nearly $200 million connected to A7A5, which is a stablecoin utilized by that network for sanctions circumvention.
Iranian involvement constituted another substantial segment of the transactions identified by FinCEN. During the period spanning May 2021 to May 2026, MEXC either sent or received roughly $1 billion in direct transfers involving over 40 Iranian crypto exchanges, some of which were under international sanctions. Moreover, the Treasury identified approximately $22 million in transactions that benefited the Islamic Revolutionary Guard Corps' Qods Force and Iran's central bank.
Despite MEXC claiming policies that forbid involvement with jurisdictions under sanctions, FinCEN determined that weaknesses in the exchange's anti-money laundering controls permitted the continuation of these prohibited transactions. This measure is part of Operation Economic Outcast, a Treasury initiative that commenced in August specifically targeting financial networks that support Iran and its methods of evading sanctions.
The order is enacted under Section 9714(a) of the Combating Russian Money Laundering Act and will become effective thirty days following its publication in the Federal Register. Any financial institutions that disregard these limitations risk facing either civil or criminal penalties.
According to the Treasury, as of September, MEXC managed a daily trading volume exceeding $1 billion and held reserves amounting to approximately $5 billion. The exchange provided access to over 3,000 different cryptocurrencies and tokenized assets.
This regulatory action underscores the increasing scrutiny applied by governmental bodies to the operational integrity of digital asset platforms, particularly concerning compliance with international sanctions regimes.
Why it matters
This action signals increased regulatory scrutiny on crypto exchanges operating within the US financial system. The enforcement action highlights how regulators are targeting compliance failures related to sanctions evasion. Readers should watch how this sets precedents for future enforcement against non-compliant exchanges.
Earlier coverage
Reported by Decrypt and cryptobriefing.com.
Topics: regulation, exchange.
