New UK rules that took effect July 17 expose crypto businesses to criminal liability of up to 14 years in prison for receiving or retaining value linked to Iran's Islamic Revolutionary Guard Corps. The designation adds section 17C offenses under the National Security Act 2023, requiring firms to track wallet attribution timing and knowledge thresholds. Blockchain settlement before identification creates the main operational challenge for UK-linked exchanges and custodians.
The IRGC became one of the first three bodies added to Schedule 6A, triggering liability when a person obtains, accepts or retains a benefit and knows or ought reasonably to know its source. The offense covers direct or indirect provision through intermediaries and applies to crypto assets despite no explicit mention in the law.
Section 17C carries a maximum sentence of 14 years on indictment for obtaining or retaining the benefit, while agreeing to do so carries up to 10 years. The rules preserve exceptions for reasonable consideration for goods or services and humanitarian activity, but these remain fact-specific.
UK persons and entities must now maintain records of transaction timing, wallet risk data at receipt, and subsequent attribution alerts. Existing FCA monitoring processes apply, yet the new exposure adds potential director liability under section 35 for consent or neglect.
The designation operates separately from financial sanctions, so an OFSI asset freeze is not required for section 17C liability to arise. Firms must distinguish the two regimes when handling wallet intelligence changes after July 17.
