The US Treasury Department is investigating whether cryptocurrency platforms have allowed Iranian officials to evade Western-imposed sanctions, Ari Redbord, global head of policy at blockchain analytics firm TRM Labs, told CoinDesk.
Redbord said researchers are moving enforcement from individual digital wallets to crypto infrastructure.
“The concern is not simply that sanctioned actors have used cryptocurrencies, which is expected in a widely sanctioned economy,” Redbord said. “The concern is that the activity appears concentrated through exchange-linked systems that function as repeatable financial access points for sanctioned networks.”
Redbord said U.S. authorities are focusing more closely as sanctions evasion efforts move from isolated wallet activity to what he described as service layer infrastructure, including exchanges, stablecoin brokers, liquidity centers and payment gateways.
One Iran-linked example identified by TRM Labs is Zedcex, a cryptocurrency exchange that the company said operated as infrastructure controlled by Iran’s Islamic Revolutionary Guard Corps (IRGC). According to TRM, the exchange processed approximately $1 billion in IRGC-linked funds, representing approximately 56% of its total trading volume, and that share will peak at 87% in 2024.
“This is direct evidence that a state actor is not resorting to laundering crypto revenue through a series of wallet addresses, but rather using crypto infrastructure,” Redbord said.
Iran Crypto Transactions Grow Up to $10 Billion
The comments add detail to growing concern in Washington over Iran’s growing use of digital assets. Iran’s crypto transaction volumes reached approximately $8 billion to $10 billion last year, based on on-chain activity identified by TRM Labs and Chainalysis, as both state-linked groups and retail users turned to digital currencies, Reuters reported.
Last week, the US Treasury Department sanctioned cryptocurrency exchanges for the first time for operating in Iran’s financial sector. The Office of Foreign Assets Control (OFAC) announced sanctions against Zedcex and Zedxion, both registered in the United Kingdom. According to the Treasury statement, the exchanges facilitated transactions for the Islamic Revolutionary Guard Corps (IRGC), which the United States and its allies in the European Union designate as a terrorist organization. Since its registration in 2022, one of them alone processed more than $94 billion in transactions, the Treasury said.
The United Nations imposed sanctions on Iran in 2025, reinstating those related to the country’s nuclear program that had been lifted in 2015. It is not the only country turning to cryptocurrencies to circumvent restrictions. In early 2025, blockchain analytics provider Chainalysis reported that countries sanctioned by the United States had received nearly $16 billion in digital assets in the previous year.
Chainalysis estimates that Iranian wallets received a record $7.8 billion in 2025, up from $7.4 billion in 2024 and $3.17 billion in 2023. The firm estimates that about half of Iran’s cryptocurrency volumes last year were linked to the IRGC, a powerful military, political and economic force closely linked to Supreme Leader Ayatollah Ali Khamenei.
In contrast, TRM Labs estimated that the majority of cryptocurrency flows linked to Iran originate from retail users, reflecting the efforts of ordinary Iranians to preserve savings, access dollars, and maintain connectivity with the global financial system as the rial continues to weaken.
Government Officials Go Beyond Opportunistic Use
“For most people in Iran, cryptocurrencies remain primarily a question of access,” Redbord said. But he said the threshold is crossed when state-linked actors move beyond opportunistic use and begin to rely on crypto-native infrastructure designed to sustain sanctioned finance at scale.
Cryptocurrency wallets are pseudonymous and easy to create, which limits the effectiveness of sanctions targeting individual addresses, Redbord said.
“When an address is sanctioned, it has very little operational value,” he said. “Rebuilding a functioning financial infrastructure is much more difficult.”
Enforcing sanctions in crypto, he added, is most effective when it disrupts liquidity and access rather than targeting individual wallets. That includes identifying clusters of activities, mapping counterparties, and exposing service providers that repeatedly facilitate the movement of funds.
As blockchain networks increasingly function as payment and settlement avenues, Redbord said their use by sanctioned states will continue to evolve.
“Legal use will continue to dominate,” he said. “But sophisticated state actors and professional sanctions evaders will increasingly operate through specialized infrastructure built on those same rails.”
