A new investigation by blockchain intelligence firm TRM Labs, reported by The Washington Post, reveals that Iran's Islamic Revolutionary Guard Corps (IRGC) has used two cryptocurrency exchanges registered in the United Kingdom to move close to $1 billion since 2023. The activity demonstrates how digital assets are being leveraged at scale to bypass international sanctions.
The exchanges, Zedcex and Zedxion, were found to operate as the same platform under different brand names, processing transactions between IRGC-controlled wallets, offshore intermediaries, and Iranian crypto firms. TRM Labs stated that transactions linked to the IRGC constituted a staggering 56% of the exchanges' total volume between 2023 and 2025.
Tether's USDT stablecoin on the Tron blockchain was the primary vehicle for these transfers. The reliance on this combination highlights a broader trend in sanctions evasion, where low fees, fast settlement, and deep liquidity make the network attractive for moving large sums outside the traditional banking system.
The scale of the IRGC-linked transfers grew rapidly: from an estimated $24 million in 2023 to $619 million in 2024, before reaching $410 million in 2025. Investigators describe this as evidence of a sustained, organized financial channel rather than ad-hoc usage. A former U.S. Treasury official noted the $1 billion figure indicates digital currencies are becoming part of Iran's "shadow banking infrastructure."
TRM Labs traced the funds by conducting test deposits and withdrawals to map the exchanges' operations, then tracking flows involving 187 wallet addresses designated by Israeli authorities as IRGC-controlled. One flagged transaction involved a $10 million transfer from an IRGC-linked wallet to a Yemeni national sanctioned for smuggling Iranian fuel to finance the Houthis.
The investigation also linked the exchanges to Babak Zanjani, an Iranian businessman previously involved in helping the government bypass oil sanctions. The findings add significant pressure on regulators, particularly in the UK, to scrutinize how crypto exchanges register, operate, and enforce compliance, highlighting the challenges of jurisdiction-based restrictions.
