The US Treasury Department is investigating whether cryptocurrency platforms have enabled Iranian officials to evade Western sanctions, Ari Redbord, global policy director at blockchain research firm TRM Labs, told CoinDesk.
Redbord said investigators are moving enforcement away from individual digital wallets and toward crypto infrastructure,
“The concern is not simply that sanctioned actors used crypto, which is expected in a heavily sanctioned economy,” Redbord said. “The concern is that activity appears to be concentrated through exchange-linked systems that act as repeatable financial access points for sanctioned networks.”
Redbord said U.S. authorities are focusing most when sanctions evasion efforts move from isolated wallet activity to what he described as service layer infrastructure, including exchanges, stablecoin corridors, liquidity hubs and payment rails.
An Iranian-linked example identified by TRM Labs is Zedcex, a cryptocurrency exchange that the firm says is run on infrastructure controlled by Iran’s Islamic Revolutionary Guard Corps (IRGC). According to TRM, the exchange processed about $1 billion in funds linked to the IRGC, accounting for about 56% of its total transaction volume, with this share peaking at 87% in 2024.
“This is direct evidence that a nation-state actor is not turning to laundering crypto proceeds through a series of wallet addresses, but to using crypto infrastructure,” Redbord said.
Iran’s crypto transactions grew to 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 about $8-10 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 operating in Iran’s financial sector for the first time. The Office of Foreign Assets Control (OFAC) announced sanctions against Zedcex and Zedxion, both registered in the UK. According to the Treasury Department’s 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 their registration in 2022, just one of these has processed over $94 billion in transactions, the Treasury Department said.
The United Nations imposed sanctions on Iran in 2025, reimposing those related to the country’s nuclear program that had been lifted in 2015. It is not the only country to resort to crypto to circumvent restrictions. In early 2025, blockchain analytics provider Chainalysis reported that US-sanctioned countries had received nearly $16 billion in digital assets 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 crypto volumes last year were linked to the IRGC, a powerful military, political and economic force closely linked to Ali Khamenelai Suprellai.
In contrast, TRM Labs estimated that most Iran-linked crypto flows originate from retail users, reflecting efforts by ordinary Iranians to preserve savings, access dollars and maintain connectivity with the global financial system as the rial continues to weaken.
Public officials go beyond opportunistic use
“For most people in Iran, crypto is primarily about 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, limiting the effectiveness of sanctions targeting individual addresses, Redbord said.
“By the time an address is sanctioned, it has very little operational value,” he said. “It is much more difficult to rebuild a functioning financial infrastructure.”
Sanctions enforcement in crypto, he added, is most effective when it disrupts liquidity and access rather than targeting single wallets. It includes identifying clusters of activity, mapping counterparties and uncovering service providers who repeatedly facilitate the movement of funds.
As blockchain networks increasingly serve as payment and settlement rails, Redbord said their use by sanctioned states will continue to evolve.
“Legal use will continue to dominate,” he said. “However, sophisticated state actors and professional sanctions evaders will increasingly operate through specialized infrastructure built on top of the same rails.”
