Iran -- Securities Classification Regulatory Overview

Executive Summary

• Iran has not established a specific legal framework for cryptocurrency or digital asset securities as of 2025–2026, and no Iranian regulatory authority has issued a licensing regime for crypto securities Iran Sanctions FAQ - Office of Foreign Assets Control
• The only applicable rules for Iran-based digital asset activity are U.S. sanctions regulations administered by the Office of Foreign Assets Control (OFAC) at the Department of the Treasury, which restrict U.S. persons and impose blocking requirements on Iranian financial institutions Federal Register :: Iranian Transactions and Sanctions Regulations
• No Iranian government agency has been named as a securities regulator for digital assets, and no licensing pathway exists for crypto exchanges, custodians, or digital asset securities issuers within Iran Federal Register :: Iranian Transactions Regulations
• In practice, no entity has secured any form of official authorization for digital asset securities activity in Iran, and the practical reality is that crypto securities businesses cannot operate legally or with regulatory certainty 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• The primary legal constraint governing crypto-related activity is the Iranian Transactions and Sanctions Regulations (ITSR), 31 CFR Part 560, which imposes comprehensive trade and financial sanctions on Iran and prohibits most transactions involving Iranian accounts and securities services Iran Sanctions FAQ - Office of Foreign Assets Control

Regulatory Framework

• The Office of Foreign Assets Control (OFAC), part of the U.S. Department of the Treasury, is the primary authority that regulates transactions involving Iran, including any digital asset securities activity with Iranian nexus; OFAC's website is https://ofac.treasury.gov Federal Register :: Iranian Transactions and Sanctions Regulations
• The Iranian Transactions and Sanctions Regulations (ITSR) are codified at 31 CFR Part 560 and were reissued in their entirety on October 22, 2012, effective the same date Federal Register :: Iranian Transactions Regulations
• The ITSR implement Executive Order 13599 of February 5, 2012, which blocks property of the Government of Iran and Iranian financial institutions, and subsections 1245(c) and (d)(1)(B) of the National Defense Authorization Act for Fiscal Year 2012 (NDAA) Federal Register :: Iranian Transactions Regulations
• The ITSR are separate from the Iranian Financial Sanctions Regulations, 31 CFR Part 561, which were reissued in their entirety on February 27, 2012, and implement the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 Federal Register :: Iranian Transactions Regulations
• On May 17, 2024, OFAC published a final rule amending the ITSR to incorporate General License D-2, which relates to the export, reexport, and provision of certain services, software, and hardware incident to communications over the internet Federal Register :: Iranian Transactions and Sanctions Regulations
• The original Iranian Transactions Regulations trace back to Executive Order 12613 of October 29, 1987, issued under the International Security and Development Cooperation Act of 1985 (22 U.S.C. 2349aa-9), which prohibited the importation of Iranian-origin goods and services Federal Register :: Iranian Transactions Regulations
• Subsequent executive orders include Executive Order 12957 (March 15, 1995), which declared a national emergency regarding Iran and imposed prohibitions on certain transactions related to Iranian petroleum resources, and Executive Order 12959 (May 6, 1995), which imposed comprehensive trade and financial sanctions on Iran without blocking sanctions Federal Register :: Iranian Transactions Regulations
• Executive Order 13059 (August 19, 1997) consolidated and clarified the previous orders governing Iran sanctions Federal Register :: Iranian Transactions Regulations
• The ITSR was amended on March 10, 2010, to add a general license in § 560.540 authorizing the exportation of certain services and software incident to the exchange of personal communications over the internet, provided such services were publicly available at no cost to the user Federal Register :: Iranian Transactions and Sanctions Regulations
• On May 30, 2013, OFAC issued General License D under the ITSR, authorizing the export or reexport, directly or indirectly, from the United States or by U.S. persons, to persons in Iran of additional services, software, and hardware incident to personal communications, including fee-based versions Federal Register :: Iranian Transactions and Sanctions Regulations
• General License D-1 was issued on February 7, 2014, replacing GL D, and General License D-2 was issued on September 23, 2022, replacing GL D-1; GL D-2 removed the "personal" qualifier from the authorization and added modern services including social media platforms, collaboration platforms, video conferencing, e-gaming, e-learning platforms, automated translation, web maps, and user authentication services Federal Register :: Iranian Transactions and Sanctions Regulations
• OFAC's regulations consider that operating a bank account for an individual or company in Iran constitutes an export of services to Iran in violation of the Iranian Transactions Regulations, and such accounts are restricted rather than blocked Iran Sanctions FAQ - Office of Foreign Assets Control
• U-Turn payments for Iran have been prohibited as of November 10, 2008 Iran Sanctions FAQ - Office of Foreign Assets Control
• The Iran Sanctions FAQ specifies that accounts with a W-8 form showing an address in Iran should be considered restricted in the absence of information proving the account holder is not in Iran Iran Sanctions FAQ - Office of Foreign Assets Control
• Clients who are visiting Iran but are not ordinarily resident in Iran do not require account restriction Iran Sanctions FAQ - Office of Foreign Assets Control
• OFAC's sanctions under the ITSR apply to U.S. persons wherever located, including overseas branches of U.S. financial institutions Iran Sanctions FAQ - Office of Foreign Assets Control
• The FATF (Financial Action Task Force) status of Iran is not addressed within the provided source texts, and no Moneyval or FATF evaluation is mentioned in the supplied materials Federal Register :: Iranian Transactions Regulations
• The Iranian Financial Sanctions Regulations define "U.S. financial institutions" to include depository institutions, banks, savings banks, money service businesses, trust companies, insurance companies, securities brokers and dealers, commodities exchanges, clearing corporations, investment companies, employee benefit plans, and U.S. holding companies or affiliates Iran Sanctions FAQ - Office of Foreign Assets Control
• The Iranian Financial Sanctions Regulations define "foreign financial institutions" broadly to include foreign depository institutions, banks, savings banks, money service businesses, trust companies, securities brokers and dealers, commodities exchanges, clearing corporations, investment companies, employee benefit plans, and holding companies, affiliates, or subsidiaries of any of these entities Iran Sanctions FAQ - Office of Foreign Assets Control
• Under the IFSR, the term "knowingly" means that a person has actual knowledge or should have known of specific conduct, a circumstance, or a result Iran Sanctions FAQ - Office of Foreign Assets Control

Licensing Requirements

• No licensing pathway exists under Iranian law for cryptocurrency exchanges, digital asset securities issuers, custodians, or any crypto-related business because the only applicable framework in the source texts is the U.S. OFAC sanctions regime, which does not provide for licensing of crypto securities businesses in Iran Federal Register :: Iranian Transactions and Sanctions Regulations
• The ITSR provides for specific licenses that may be issued with respect to the operation of Iranian accounts that constitute accounts of foreign government missions and their personnel in Iran, or diplomatic missions of the Government of Iran to international organizations in the United States or the Iranian Interests Section of the Embassy of Pakistan in the United States 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• United States depository institutions are authorized to provide limited services with respect to Iranian accounts other than blocked accounts, including maintenance of accounts, payment of interest, debiting of service charges, and closing accounts at the request of the account party who is not the Government of Iran or an Iranian financial institution 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• United States registered brokers or dealers in securities are authorized to provide limited services including maintenance of Iranian accounts other than blocked accounts, payment of interest and dividends, execution of stock splits and dividend reinvestment plans, and one-time liquidation of all assets at fair market value upon account closing 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• The authorization under 31 CFR § 560.517 specifically excludes accounts of the Government of Iran, Iranian financial institutions, or any other person whose property and interests in property are blocked pursuant to § 560.211 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• The general license in § 560.540 authorizes the exportation of certain services and software incident to the exchange of personal communications over the internet only where such services and software are publicly available at no cost to the user Federal Register :: Iranian Transactions and Sanctions Regulations
• General License D-2 authorizes cloud-based services and software in support of authorized software or services or of any other transaction authorized pursuant to the Regulations Federal Register :: Iranian Transactions and Sanctions Regulations
• General License D-2 clarifies restrictions on the exportation of web-hosting services or domain name registration services Federal Register :: Iranian Transactions and Sanctions Regulations
• No capital requirements expressed in EUR or USD are stated in the source texts for any licensing regime related to crypto or digital asset securities in Iran Iran Sanctions FAQ - Office of Foreign Assets Control
• No application process or timeline for a crypto-related license in Iran is described in the provided materials because no such licensing regime exists Federal Register :: Iranian Transactions Regulations
• Zero entities have been licensed by any Iranian authority for cryptocurrency or digital asset securities activity, as no such licensing framework is identified in the provided sources 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• OFAC's General License D-2 was incorporated into the ITSR by a final rule effective May 17, 2024, but this license pertains only to internet communications services and software, not to digital asset securities Federal Register :: Iranian Transactions and Sanctions Regulations
• The specific licensing policy expanded under GL D-2 relates to communications-related software and services, not to securities dealing, brokerage, or crypto activities Federal Register :: Iranian Transactions and Sanctions Regulations
• There is no evidence in the source texts of any structural requirements imposed by an Iranian authority for digital asset securities businesses Iran Sanctions FAQ - Office of Foreign Assets Control

AML/KYC Requirements

• The source texts do not describe any AML/KYC requirements imposed by Iranian authorities for cryptocurrency or digital asset securities businesses, and no Iranian anti-money laundering rules for virtual assets are mentioned 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• OFAC's Iranian Financial Sanctions Regulations include provisions related to money laundering as a sanctionable activity for foreign financial institutions, specifically identifying "engaging in money laundering, or facilitating efforts by the Central Bank of Iran or any other Iranian financial institution" as a sanctionable activity Iran Sanctions FAQ - Office of Foreign Assets Control
• The term "knowingly" under the IFSR requires that a person has actual knowledge or should have known of specific conduct, a circumstance, or a result, which is relevant for AML compliance determinations Iran Sanctions FAQ - Office of Foreign Assets Control
• U.S. financial institutions are required to block all property and interests in property of the Government of Iran, including the Central Bank of Iran, and all Iranian financial institutions that are in the United States, come within the United States, or come within the possession or control of U.S. persons Iran Sanctions FAQ - Office of Foreign Assets Control
• The blocking requirement means that entities appearing with the IRAN tag on OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List) must have their transactions blocked unless exempt or authorized by OFAC Iran Sanctions FAQ - Office of Foreign Assets Control
• E.O. 13599 defines an "Iranian financial institution" as a financial institution organized under the laws of Iran or any jurisdiction within Iran, any financial institution in Iran, any financial institution wherever located owned or controlled by the Government of Iran, and any financial institution owned or controlled by any of the aforementioned entities Iran Sanctions FAQ - Office of Foreign Assets Control
• An account with a W-8 form showing an address in Iran should be considered restricted unless the financial institution can prove to its satisfaction that the account holder is not in Iran Iran Sanctions FAQ - Office of Foreign Assets Control
• The IFSR specifies that in determining whether a transaction is "significant," the Treasury Department may consider the size, number, frequency, and nature of the transaction, the level of awareness of management, the nexus with blocked entities, the impact on CISADA goals, whether deceptive practices are involved, and other factors Iran Sanctions FAQ - Office of Foreign Assets Control
• A finding by the Treasury Department that a foreign financial institution knowingly engages in sanctionable activities is necessary before the Treasury Department can prohibit or impose strict conditions on correspondent accounts or payable-through accounts Iran Sanctions FAQ - Office of Foreign Assets Control
• The Treasury Department will generally reach out to foreign financial institutions to inquire about their conduct before making a finding of sanctionable activity Iran Sanctions FAQ - Office of Foreign Assets Control
• If the Treasury Department imposes strict conditions or prohibitions, it will issue an order or regulation published in the Federal Register or add the institution to the part 561 list Iran Sanctions FAQ - Office of Foreign Assets Control
• No customer due diligence (CDD), enhanced due diligence (EDD), suspicious transaction reporting (STR), record retention, beneficial ownership, or PEP screening requirements from Iranian authorities are described in the provided source materials Iran Sanctions FAQ - Office of Foreign Assets Control

Enforcement Actions

• The source texts describe potential penalties under the IFSR, noting that any U.S. person who violates the correspondent account provisions may be subject to civil penalties of up to the greater of $250,000 or twice the transaction value, and criminal penalties for willful violations of up to $1 million and 20 years in prison Iran Sanctions FAQ - Office of Foreign Assets Control
• A U.S. financial institution may be subject to civil penalties of up to the greater of $250,000 or twice the transaction value if any person it owns or controls violates the IFSR prohibition on engaging in any transaction with or benefitting the Islamic Revolutionary Guard Corps (IRGC) or its blocked affiliates, and if the U.S. financial institution knew or should have known of the violation Iran Sanctions FAQ - Office of Foreign Assets Control
• The source texts do not describe any specific enforcement cases, fines, arrests, or penalties imposed on any entity for cryptocurrency or digital asset securities violations involving Iran Federal Register :: Iranian Transactions and Sanctions Regulations
• No enforcement actions against named entities related to crypto and Iran are contained in the provided materials Federal Register :: Iranian Transactions Regulations
• The IFSR provides that sanctions against foreign financial institutions may be waived if the Secretary of the Treasury determines that a waiver is necessary to the national interest of the United States Iran Sanctions FAQ - Office of Foreign Assets Control
• The SDN List is described as dynamic, and designated persons include natural and legal persons; all interests in property of designated persons are blocked, including entities in which designated persons own a 50 percent or greater interest Iran Sanctions FAQ - Office of Foreign Assets Control

Tax Treatment

• No tax guidance has been issued for virtual assets in the context of Iran, as the provided source texts do not address any taxation of cryptocurrency, digital asset securities, capital gains, income tax, or VAT with respect to Iran Iran Sanctions FAQ - Office of Foreign Assets Control
• The source materials exclusively relate to U.S. economic sanctions administered by OFAC and do not contain any Iranian tax law provisions applicable to crypto or digital assets Federal Register :: Iranian Transactions and Sanctions Regulations
• No Iranian tax authority, tax code, or fiscal regulation regarding virtual assets is mentioned in any of the provided source texts Federal Register :: Iranian Transactions Regulations
• The ITSR provisions address export controls and financial sanctions, not tax treatment of digital assets 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute

Key Gaps & Risks

• There is a complete absence of any Iranian domestic legal framework for cryptocurrency or digital asset securities, and the only applicable rules in the provided sources are U.S. sanctions regulations Federal Register :: Iranian Transactions and Sanctions Regulations
• The most significant gap is that no Iranian regulatory authority has been identified as responsible for overseeing, licensing, or supervising digital asset securities activity Iran Sanctions FAQ - Office of Foreign Assets Control
• Businesses engaging in any crypto or digital asset securities activity with Iranian nexus face the risk of U.S. sanctions enforcement, including civil penalties of up to the greater of $250,000 or twice the transaction value, and criminal penalties of up to $1 million and 20 years in prison for willful violations Iran Sanctions FAQ - Office of Foreign Assets Control
• Foreign financial institutions that facilitate significant transactions for the Islamic Revolutionary Guard Corps or blocked Iranian-linked financial institutions may be subject to prohibition or strict conditions on their U.S. correspondent accounts or payable-through accounts Iran Sanctions FAQ - Office of Foreign Assets Control
• The risk of inadvertently engaging with blocked persons is heightened because OFAC considers a person to have an interest in all property and entities in which they own, directly or indirectly, a 50 percent or greater interest, even if those entities do not appear on the SDN List Iran Sanctions FAQ - Office of Foreign Assets Control
• U.S. persons, including U.S. financial institutions and securities brokers or dealers, cannot provide services related to Iranian accounts linked to the Government of Iran, Iranian financial institutions, or blocked persons under § 560.517 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• The restrictions on Iranian accounts mean that even routine securities maintenance activities, such as collecting dividends, executing stock splits, or liquidating positions, are limited to non-blocked accounts and cannot involve Government of Iran entities or Iranian financial institutions 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• The U-Turn payment prohibition means that no fund routing through U.S. financial institutions for Iran-related transactions is permitted, which may affect crypto-to-fiat conversions Iran Sanctions FAQ - Office of Foreign Assets Control
• The W-8 address indicator rule creates compliance risk for financial institutions, as an account showing an Iranian address must be restricted unless the institution can affirmatively prove the account holder is not in Iran Iran Sanctions FAQ - Office of Foreign Assets Control
• The gap between the authorization for personal communications software and services under GL D-2 and any potential crypto activity is substantial, as GL D-2 explicitly covers social media, collaboration platforms, video conferencing, e-gaming, e-learning, automated translation, web maps, and user authentication services but does not mention digital assets or securities Federal Register :: Iranian Transactions and Sanctions Regulations
• The practical reality is that no crypto securities business can operate in Iran with legal certainty, as there is no Iranian licensing authority, no registration mechanism, and no compliance pathway described in the available sources 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute
• The blocking requirements under E.O. 13599 create significant operational risk for any financial institution that may encounter Iranian-linked digital asset transactions, since all property of the Government of Iran, the Central Bank of Iran, and Iranian financial institutions must be frozen Iran Sanctions FAQ - Office of Foreign Assets Control

Sources

• Iran Sanctions FAQ - Office of Foreign Assets Control
• Federal Register :: Iranian Transactions and Sanctions Regulations
• Federal Register :: Iranian Transactions Regulations
• 31 CFR § 560.517 - Exportation of services: Iranian accounts at United States depository institutions or United States registered brokers or dealers in securities. | Electronic Code of Federal Regulations (e-CFR) | US Law | LII / Legal Information Institute