As Iran weathers another year of punishing US sanctions, mounting geopolitical pressure and a rapidly weakening currency, American investigators are turning their focus to a new financial frontier — cryptocurrency.
US Treasury officials are examining whether specific crypto platforms have facilitated sanctions evasion by Iranian officials and state-linked entities, Reuters reported on Wednesday, citing blockchain analytics firm TRM Labs.
At the heart of the probe is a growing suspicion in Washington that crypto rails may have offered Tehran, and in particular the Islamic Revolutionary Guard Corps (IRGC), a partial workaround to the dollar-dominated global financial system from which it has long been cut off.
Chainalysis, a US-based blockchain analytics firm, estimates that roughly 50 per cent of Iran’s crypto transaction volumes last year were linked to the IRGC.
TRM Labs, which tracks illicit crypto flows, estimates that around 95 per cent of Iran-linked crypto activity comes from retail investors. However, it says it has identified more than 5,000 wallet addresses associated with the IRGC and estimates the Guards have moved approximately $3 billion in crypto since 2023, Reuters reported.
In a report published on January 9, TRM Labs said that two UK-incorporated exchanges — Zedcex and Zedxion — processed around $1 billion in crypto linked to the IRGC since 2023.
The report also links the corporate trail to Babak Zanjani, a previously sanctioned Iranian financier accused of facilitating oil revenue transfers for regime entities. TRM further said that wallets tied to the exchange directly transferred over $10 million in USDT to a US-designated Houthi financier, indicating that crypto infrastructure may have been used for operational funding, not just sanctions circumvention.
$8–10 billion in annual crypto activity
Iran’s overall crypto activity has surged in recent years. In a separate report released on January 28, TRM Labs said that transaction volumes linked to Iran reached roughly $10 billion last year. Chainalysis said Iranian wallets received a record $7.8 billion in 2025, up sharply from just over $3 billion in 2023.
While crypto remains small compared to Iran’s oil revenues — estimated by the US Energy Information Administration at $53 billion in 2023.
TRM’s report titled as “2026 Crypto Crime Report” underscores a global shift: major geopolitical players, including Iran and Venezuela, are leaning further into cryptocurrency as “durable financial infrastructure” for sanctions-constrained payments.
Although illicit crypto volume globally rose to $158 billion in 2025, it still represented just 1.2 per cent of total on-chain activity, suggesting that state-linked use is intertwined with broader market participation rather than operating in isolation.
In Iran’s case, crypto’s appeal lies in its ability to bypass correspondent banks, SWIFT messaging systems and Western-controlled clearing mechanisms.
IRGC and the sanctions playbook
The IRGC, already designated under US terrorism and sanctions regimes, has been accused in the past of operating complex shadow-banking and front-company networks to move funds, procure goods and sustain regional proxy operations.
Blockchain researchers say crypto may now be an additional layer in that ecosystem.
British blockchain analytics firm Elliptic has reported that the Central Bank of Iran acquired at least $507 million worth of the stablecoin USDT in 2025, describing it as a “sophisticated strategy to bypass the global banking system.”
Stablecoins, digital tokens pegged to the US dollar, are particularly attractive because they combine the relative price stability of fiat currency with the borderless mobility of crypto.
Tether, which issues USDT, has said it maintains a zero-tolerance policy toward criminal use of its tokens and works with law enforcement to freeze assets linked to illicit activity.
Retail investors fleeing the rial
Yet the Iranian crypto story is not solely about state actors.
Ordinary Iranians, battered by inflation and the sharp devaluation of the rial, have increasingly turned to digital assets as a store of value. Industry estimates suggest that up to 15 million Iranians have some exposure to crypto. Nobitex, the country’s largest exchange, says it has around 11 million users, with most activity coming from retail investors.
“For many users, crypto primarily functions as a store of value in response to the continued depreciation of the local currency,” Nobitex told Reuters.
Blockchain data suggests that crypto activity in Iran spikes during periods of social or geopolitical instability — including anti-government protests and military escalations — as citizens seek to protect savings or quietly move capital abroad.
Researchers at Singapore-based Nansen have observed that some Iranian users have transferred funds from domestic exchanges to international platforms or self-custodied wallets. In some cases, balances on local exchanges have declined sharply following episodes of unrest or cyberattacks, including a high-profile hack of Nobitex last year.
Sanctions vs. software
For Washington, the probe into Iran’s crypto ecosystem highlights a broader geopolitical reality: sanctions enforcement is increasingly colliding with decentralised financial technology.
Crypto’s architecture — borderless, programmable and pseudonymous — does not eliminate the reach of US enforcement, but it complicates it. Sophisticated blockchain analytics now enable authorities to trace transactions across chains, yet resource constraints and the ease of wallet creation make enforcement reactive rather than preventive.
The scale of the challenge is not confined to Iran. TRM Labs notes that sanctions-related crypto activity in 2025 was heavily driven by Russia-linked flows, particularly via a ruble-pegged stablecoin that processed tens of billions of dollars in volume. The pattern suggests that crypto is no longer peripheral to geopolitics; it is becoming embedded in statecraft.
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