Treasury cuts MEXC off from US financial system over $16B in illicit transactions

What happened

The U.S. Treasury Department's Financial Crimes Enforcement Network issued an order Friday severing MEXC Global, one of the world's 20 largest crypto exchanges, from the American financial system. The action bars U.S. financial institutions from processing any funds transfers to or from the platform, effective 30 days after publication in the Federal Register.

Treasury accused MEXC of facilitating at least $16 billion in transactions connected to illicit activity, including sanctions evasion benefiting Iran, Russia and North Korea, as well as cybercrime proceeds. According to FinCEN's findings, between May 2021 and May 2026, the exchange processed roughly $1.5 billion tied to Russian sanctions evasion, including $232 million in direct transactions with sanctioned entities. The agency also identified approximately $200 million linked to the A7A5 stablecoin and roughly $22 million benefiting Iran's central bank and Islamic Revolutionary Guard Corps.

Treasury Secretary Scott Bessent characterized the order as part of efforts to cut off economic support for the Iranian regime. "Financial institutions cannot have it both ways: Either you support the Iranian regime, or you have access to the U.S. financial system," Bessent said in a statement. Founded in 2018, MEXC processes more than $1 billion in daily transactions and holds approximately $5 billion in reserves, according to FinCEN.

Why it matters

The action represents Treasury's expanding use of enforcement tools to target crypto infrastructure that operates outside traditional banking channels. By employing a provision of the Combating Russian Money Laundering Act rather than a standard sanctions designation, FinCEN demonstrated how it can cut off exchanges that may not be accessible through conventional correspondent banking systems. The order signals that major crypto platforms face serious consequences for compliance failures, regardless of their size or public commitments to anti-money-laundering safeguards.

Background

The order falls under Operation Economic Outcast, a Treasury campaign launched in August aimed at dismantling financial networks used by Iran to evade sanctions. In recent months, Treasury has escalated its pressure on the crypto sector, designating Russia's A7 Network as a transnational criminal organization and blacklisting the Iranian exchange Nobitex for its role in funneling cryptocurrency to sanctioned entities. The same enforcement effort has targeted specific stablecoins and the exchanges processing them, revealing how digital assets have become central to state-level sanctions evasion strategies.

According to FinCEN's findings, MEXC's compliance infrastructure contained severe deficiencies despite the exchange's public claims of robust anti-money-laundering controls and geographic restrictions. The platform continued transacting with sanctioned Russian exchange Garantex and its successor Grinex as recently as June 2026, more than four years after Garantex first received sanctions designation. These failures suggest that MEXC either lacked adequate monitoring systems or chose not to enforce compliance measures.

What to watch

The order takes effect 30 days after its publication in the Federal Register, providing a window for affected parties to adjust their operations. MEXC has not publicly responded to the Treasury action as of reporting. Cointelegraph noted it contacted the exchange for comment without receiving a response by publication. The effectiveness of the order will depend on compliance by U.S. financial institutions and could shape how other major crypto exchanges approach sanctions compliance going forward.

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