Blockchain analytics firm TRM Labs recently released a report revealing a startling fact: since 2023, Iran’s Islamic Revolutionary Guard Corps (IRGC) has moved approximately $1 billion through two UK-registered cryptocurrency exchanges. The report indicates that these two exchanges are effectively operated by the same entity, with IRGC-related transactions accounting for 56% of their total volume from 2023 to 2025. The vast majority of these transactions used the USDT stablecoin on the Tron network.
Incident Investigation
TRM Labs’ report provides a detailed trace of these transaction activities. By analyzing small deposit and withdrawal operations, the firm uncovered the internal wallet infrastructure of the exchanges and tracked the flow of funds from 187 IRGC-controlled wallet addresses designated by Israeli authorities last year. One confirmed transaction involved a payment as large as $10 million, moving from an IRGC wallet to an address controlled by a Yemeni national sanctioned by the U.S. Treasury Department for smuggling Iranian fuel to fund the Houthi movement.
TRM Labs also linked these exchanges to Iranian businessman Babak Zanjani, who helped the government circumvent oil sanctions during former President Ahmadinejad’s administration. This connection further underscores the close ties between these exchanges and Iran’s sanction-evasion activities.
Flow of Funds
According to the report, the growth in IRGC-linked transactions has been dramatic: just $24 million in 2023, surging to $619 million in 2024, and reaching $410 million in 2025. This rapid escalation suggests that Iran is shifting from sporadic use of crypto transactions to building dedicated financial infrastructure for systematically evading international sanctions.
The timing of these transactions reveals a strategic intent by the IRGC to use cryptocurrencies for large-scale fund transfers, marking a clear departure from traditional, smaller-scale methods of sanctions evasion.
Notably, over 94% of these transactions used USDT on the Tron network. This indicates the IRGC’s preference for blockchain networks that offer fast transaction speeds and low fees, as well as stablecoins pegged to the US dollar to maintain the value of their funds.
Transaction Details
On the surface, both UK-registered exchanges claim to comply with anti-money laundering regulations, but their actual practices tell a different story. One exchange lists Iran as a prohibited jurisdiction, while the other does not. This approach allows the exchanges to maintain a façade of compliance while retaining operational flexibility to process funds from Iran.
The report highlights the complexity of their fund routing: money moves among IRGC-controlled wallets, offshore intermediaries, and Iranian crypto companies, creating a tangled financial network.
The anonymity and cross-border nature of cryptocurrency transactions provide a natural cover for sanction-evasion activities, which is a key reason the IRGC has chosen this channel for large-scale fund transfers.
Industry Impact
This report poses a reputational challenge for the cryptocurrency industry. Former U.S. Treasury official Miad Maleki noted, "A billion dollars in two years shows that digital currency is becoming a financial channel for Iran’s shadow banking system." The incident signals that regulatory pressure on the crypto industry will intensify, especially regarding international sanctions compliance and anti-money laundering measures.
For legitimate crypto exchanges, this likely means stricter regulatory scrutiny and heightened compliance requirements. Both investors and regulators will pay closer attention to exchanges’ compliance procedures, prompting exchanges to invest more resources in building and maintaining effective compliance frameworks.
It’s important to note that these activities do not represent the entire crypto industry, but rather highlight issues at a small number of exchanges lacking robust compliance controls.
The Importance of Compliance
For everyday crypto users, this incident underscores the importance of choosing compliant exchanges. Such platforms typically implement rigorous identity verification processes, transaction monitoring systems, and suspicious activity reporting mechanisms. At Gate, for example, we adhere to strict KYC (Know Your Customer) and AML (Anti-Money Laundering) policies to ensure all user activities meet international regulatory standards. These measures not only protect the exchange itself but also safeguard users from potential financial risks and legal issues.
Regulatory responses to incidents like this may accelerate the development of comprehensive global crypto regulatory frameworks, including stricter exchange registration requirements, enhanced transaction monitoring, and greater cross-border law enforcement cooperation.
When selecting a crypto trading platform, users should prioritize exchanges that transparently disclose their compliance policies, have strong regulatory records, and hold necessary licenses in major jurisdictions.
Market Outlook
The maturation of the cryptocurrency market is accompanied by an evolving regulatory landscape. Global regulators are strengthening cooperation and working toward more unified standards to address the cross-border financial risks posed by cryptocurrencies. According to Gate market data, as of January 12, 2026, despite various challenges, major cryptocurrencies remain resilient. The Bitcoin price fluctuates around $92,166.9, while Ethereum trades near $3,162.76.
Market analysts point out that the long-term growth of the crypto industry depends on balancing technological innovation with regulatory compliance. On one hand, blockchain technology offers unprecedented financial inclusion and efficiency; on the other, effective regulatory frameworks are essential for preventing illicit activity and protecting investor interests. While incidents involving sanctions evasion may spark regulatory scrutiny in the short term, over the long run, they help drive the industry toward stronger compliance standards and more transparent operations.
Both the UK’s Office of Financial Sanctions Implementation and Iran’s UN mission spokesperson declined to comment on the matter, and the two exchanges involved did not respond to requests for comment. However, the gap between compliance statements on their websites and their actual practices has been thoroughly documented by blockchain analytics. Once blockchain investigators fully map out the exchanges’ internal wallet infrastructure, those sanction-evasion transaction routes are no longer just digital hops between crypto addresses—they become transparent corridors of fund movement. The crypto market is learning from this regulatory storm, and each exposure of illicit activity pushes compliance standards one step forward.
