Ari Redbord, global head of policy at blockchain analytics firm TRM Labs, told CoinDesk that the U.S. Treasury Department is investigating whether cryptocurrency platforms enable Iranian officials to evade Western sanctions.
Redbold said investigators are shifting enforcement efforts away from personal digital wallets and towards crypto infrastructure,
“The concern is not just the use of cryptocurrencies by sanctioned actors, which is to be expected in a fully sanctioned economy,” Redbold said. “What is concerning is that these activities appear to be concentrated through exchange-related systems that serve as repeatable financial access points to sanctioned networks.”
Redbold said U.S. authorities are most concerned when sanctions evasion moves from isolated wallet activity to what he calls service layer infrastructure, including exchanges, stablecoin corridors, liquidity centers and payment rails.
One Iran-related example TRM Labs discovered is Zeddcex, a cryptocurrency exchange that the company says operates as infrastructure controlled by Iran’s Islamic Revolutionary Guard Corps (IRGC). According to TRM, the exchange handled approximately $1 billion in IRGC-related funds, accounting for approximately 56% of its total trading volume, with this share peaking at 87% in 2024.
“This is direct evidence that state actors no longer launder crypto proceeds through a series of wallet addresses, but instead use crypto infrastructure,” Redbold said.
Iran’s cryptocurrency trading volume rises to $10 billion
The comments further heightened Washington’s concerns about Iran’s expanded use of digital assets. According to Reuters, Iran’s cryptocurrency trading volume reached approximately $8-10 billion last year, as state-related groups and retail users turned to digital currencies, according to on-chain activity identified by TRM Labs and Chainaanalysis.
Last week, the U.S. Treasury Department approved for the first time a cryptocurrency exchange operating in Iran’s financial sector. The Office of Foreign Assets Control (OFAC) announced sanctions against UK-registered Zedcex and Zedxion. According to a Treasury Department statement, the exchanges facilitated transactions by the Islamic Revolutionary Guard Corps (IRGC), which the United States and its EU allies designate as a terrorist organization. Since registering in 2022, one alone has processed more than $94 billion in transactions, the Treasury Department said.
The United Nations imposed sanctions on Iran in 2025, reinstating sanctions lifted in 2015 related to the country’s nuclear program. Iran is not the only country using cryptocurrencies to circumvent restrictions. In early 2025, blockchain analytics provider Chainaanalysis 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 will receive 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 trading volume last year was linked to the IRGC, a powerful military, political and economic force closely linked to Supreme Leader Ayatollah Ali Khamenei.
In contrast, TRM Labs estimates that most Iran-related cryptocurrency traffic comes from retail users, reflecting the efforts of ordinary Iranians to preserve their savings, obtain dollars, and maintain connectivity to the global financial system as the rial continues to weaken.
Government Officials Move Beyond Opportunistic Exploitation
“For most people in Iran, cryptocurrencies are still primarily about access,” Redbold said. But he said a threshold is crossed when state-linked actors move beyond opportunistic uses and start relying 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, Redbold said.
“By the time an address is approved, it has little operational value,” he said. “It’s much harder to rebuild a functioning financial infrastructure.”
Sanctions against cryptocurrencies are most effective when they disrupt liquidity and access rather than targeting single wallets, he added. This includes identifying clusters of activity, mapping counterparties and uncovering service providers that repeatedly facilitate financial flows.
Redbord said the use of blockchain by sanctioned countries will continue to grow as blockchain networks increasingly serve as payment and settlement rails.
“Legal use will continue to dominate,” he said. “But sophisticated state actors and professional sanctions evaders will increasingly operate through specialized infrastructure built on top of these railroads.”
