Iran Leveraged UK Crypto Platforms to Evade Sanctions with $1 Billion in Secret Transactions

In a recent report from TRM Labs, it has been unveiled that two UK-based crypto exchanges processed around $1 billion in transactions related to Iran’s Islamic Revolutionary Guard Corps (IRGC) while operating publicly like regular trading platforms.

Key Takeaways

Two UK crypto exchanges, Zedcex and Zedxion, facilitated around $1 billion in transactions for Iran's IRGC.
Illicit flows constituted about 56% of their transaction volume, peaking at 87% in 2024.
These exchanges utilized shell structures, with ties to sanctioned individuals and entities, to evade detection.
Over $10 million in USDT was traced directly from Zedcex to an individual sanctioned for supporting the IRGC.
Iran’s crypto activities have faced increasing scrutiny and pressure, leading to declining flows.

Iran Leveraged UK Crypto Platforms to Evade Sanctions

Overview of Irregular Transactions

According to the January 9 report from TRM Labs, Zedcex and Zedxion have been implicated in financing operations for the IRGC. Approximately 56% of the total transaction volume on these platforms was linked to illicit activities, with this figure reaching as high as 87% in 2024.

Incorporating themselves in the UK between 2021 and 2022, the exchanges used nominal directors and virtual office addresses. They frequently filed dormant accounts, despite handling billions in on-chain transactions.

Corporate records show a direct connection between Zedcex and Babak Morteza Zanjani, an individual previously sanctioned by the US and EU for laundering substantial oil revenue linked to Iranian regime entities, including the IRGC, prior to the lifting of sanctions under the now-expired Iran nuclear agreement.

Annual Value of Iran UK Crypto Transactions

Significant Financial Flows Processed

The IRGC-related addresses associated with Zedcex processed $23.7 million in 2023, accounting for 60% of total activity. This surged dramatically to $619.1 million in 2024, with the IRGC's share skyrocketing to 87%. In 2025, activity decreased to $410.4 million, as flows unrelated to the IRGC increased, resulting in a lower share of 48%.

Both exchanges appeared to operate as a single entity despite being separately registered in the UK. They shared directors, addresses, and coordinated activities that implied operational continuity rather than independence. Zanjani's exit from Zedxion was closely followed by the establishment of Zedcex, suggesting a persistent control structure.

After his arrest in Iran and a subsequent death sentence for embezzling funds from Iran’s National Oil Company, Zanjani's sentence was reduced in 2024 following repayment of those funds. He subsequently became involved in various regime-linked economic ventures through DotOne Holding Group, which operates across cryptocurrency, foreign exchange, logistics, and telecommunications sectors.

Current Status of Iran UK Crypto Transactions

Direct Links to Terror Finance Revealed

TRM Labs found that over $10 million in USDT was transferred directly from wallets linked to both Zedcex and the IRGC to addresses held by Sa’id Ahmad Muhammad al-Jamal. Al-Jamal has been sanctioned by the US Treasury for providing support to the IRGC and managing smuggling networks funding Yemen’s Houthis. These findings indicate that Zedcex was not just a mere connection in the financial chain but actively facilitated funding.

This case emphasizes the growing trend of sanctioned nation-states being involved in cryptocurrency-related crimes. Data from Chainalysis highlighted that illicit addresses received at least $154 billion in 2025, a notable increase from $59 billion in 2024, significantly driven by a rise in activities involving sanctioned entities.

Trends in Crypto Crime from 2009 to 2025

Conclusion and Future Implications

As a significant portion of illicit transactions—84%—involved stablecoins, the trend demonstrates how these digital assets facilitate easier cross-border transfers and provide lower volatility. Throughout 2025, Iran's broader cryptocurrency operations faced considerable challenges, with transactions involving Iranian entities declining to $3.7 billion from January to July, a decrease of 11% compared to 2024.

The US Treasury imposed sanctions on two Iranian nationals in September for orchestrating crypto oil sales exceeding $100 million that benefited the IRGC. Additionally, Iran has been exploring the acceptance of digital currencies for trade in advanced weaponry, including ballistic missiles and drones, through its Ministry of Defense Export Center.

Likewise, Russia introduced its ruble-backed A7A5 token in February 2025, processing over $93.3 billion in transactions within a short span, reflecting a growing trend of leveraging cryptocurrency to navigate around Western financial sanctions.