Shocking revelation: Iran uses a UK-registered cryptocurrency exchange to transfer $1 billion to evade international sanctions

A blockchain analysis company TRM Labs recently released a report revealing a startling fact: since 2023, the Islamic Revolutionary Guard Corps of Iran has transferred approximately $1 billion through two cryptocurrency exchanges registered in the UK. The report shows that these two exchanges are essentially operated by the same entity, with transactions related to the IRGC accounting for 56% of their total trading volume from 2023 to 2025, most of which was completed using USDT stablecoins on the Tron network.

Incident Investigation

TRM Labs’ report tracks these transactions in detail. The organization uncovered the internal wallet infrastructure of the exchanges through small deposits and withdrawals, and traced the flow of funds to 187 wallet addresses controlled by the IRGC that were designated by Israeli authorities last year. One confirmed transaction involved a payment of up to $10 million flowing from an IRGC-controlled wallet to an address controlled by a Yemeni national sanctioned by the U.S. Treasury Department. This individual was previously listed for smuggling Iranian fuel to fund Houthi militants.

TRM Labs also linked these exchanges to Iranian businessman Babak Zanjani, who helped the government circumvent oil sanctions during President Ahmadinejad’s administration. This connection further highlights the close ties between these exchanges and Iran’s sanctions evasion activities.

Fund Flows

According to the data in the report, the growth rate of IRGC-related transactions is astonishing: only $24 million in 2023, skyrocketing to $619 million in 2024, and reaching $410 million in 2025. This rapid growth pattern indicates that Iran is shifting from sporadic cryptocurrency transactions to establishing dedicated financial infrastructure to systematically evade international sanctions.

The temporal distribution of trading activity shows that the IRGC is employing a strategic approach to large-scale fund transfers via cryptocurrencies, a pattern distinctly different from traditional, smaller-scale sanctions evasion methods.

Notably, over 94% of these transactions are completed using USDT on the Tron network, indicating a preference for blockchain networks that offer fast transaction speeds and low fees, as well as dollar-pegged stablecoins to maintain the stability of funds.

Transaction Details

The two UK-registered exchanges claim to comply with anti-money laundering regulations on the surface, but their actual operations differ significantly. One exchange lists Iran as a prohibited jurisdiction, while the other does not. This approach allows these exchanges to maintain a facade of compliance while operating flexibly in practice, providing operational space for handling funds from Iran.

The report points out that the routing of funds through these exchanges is highly complex: funds flow between wallets controlled by the IRGC, offshore intermediaries, and Iranian cryptocurrency companies, forming an intricate financial network.

The anonymity and cross-border nature of cryptocurrency trading provide natural cover for such sanctions evasion activities, which is a key reason why the IRGC has chosen this channel for large-scale fund transfers.

Industry Impact

This report poses a challenge to the reputation of the cryptocurrency industry. Former U.S. Treasury official Miad Maleki stated, “The $1 billion figure over two years indicates that digital currencies are becoming a financial channel for Iran’s shadow banking system.” This incident suggests that regulatory pressure on the crypto industry will intensify, especially regarding international sanctions compliance and anti-money laundering measures.

For legitimate cryptocurrency exchanges, this could mean stricter regulatory scrutiny and compliance requirements. Investors and regulators will pay increased attention to exchanges’ compliance procedures, and exchanges will need to invest more resources to establish and maintain effective compliance frameworks.

It is important to note that these activities do not represent the entire crypto industry but are issues associated with a minority of exchanges lacking effective compliance controls.

Importance of Compliance

For ordinary cryptocurrency users, this incident underscores the importance of choosing compliant exchanges. Compliant exchanges typically implement strict KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures, ensuring all user activities meet international regulatory standards. For example, at Gate, we adhere to rigorous KYC and AML policies to protect both the exchange and users from potential financial risks and legal issues.

Regulatory responses to such incidents may accelerate the development of global cryptocurrency regulatory frameworks, including stricter exchange registration requirements, enhanced transaction monitoring mechanisms, and cross-border law enforcement cooperation.

When selecting a crypto trading platform, users should prioritize exchanges that transparently disclose their compliance policies, have a good regulatory record, and hold necessary licenses in major jurisdictions.

Market Trends

The maturation of the cryptocurrency market is accompanied by ongoing improvements in the regulatory environment. Global regulators are strengthening cooperation and developing more unified standards to address cross-border financial risks posed by cryptocurrencies. According to Gate market data, as of January 12, 2026, despite various challenges, major cryptocurrencies remain resilient. Bitcoin fluctuates around $92,166.9, and Ethereum trades near $3,162.76.

Market analysts note that the long-term development of the crypto industry depends on balancing technological innovation with regulatory compliance. Blockchain technology offers unprecedented financial inclusion and efficiency, but effective regulation is crucial to prevent illegal activities and protect investors. Incidents involving sanctions evasion may draw regulatory attention in the short term but are ultimately beneficial for establishing more robust compliance standards and transparent operational practices in the industry.

The UK Office of Financial Sanctions Implementation and the Iranian delegation to the United Nations have both declined to comment. The involved exchanges did not respond to requests for comment. However, the gap between their public compliance statements and actual actions has been thoroughly documented by blockchain analysis technology. When blockchain investigators fully reveal the internal wallet infrastructure of exchanges, the paths of sanctions-evading transactions are no longer just digital jumps between addresses but become transparent corridors of fund flow. The crypto market is learning from this regulatory storm, and each exposure of illegal activity pushes compliance standards forward by a small step.