TL;DR
- Investigators say crypto exchanges linked to Iran and registered in the UK processed $1 billion tied to the IRGC.
- The firms were UK-registered but unlicensed, exposing gaps between registration, supervision, and enforcement.
- The case shows Iran uses crypto more systematically, creating reputational and systemic risks for the UK financial system.
Blockchain investigators say two crypto exchanges registered in the UK processed roughly $1 billion in transactions linked to Iran. The report places renewed scrutiny on how lightly supervised platforms can become conduits for sanctioned actors. According to blockchain intelligence firm TRM Labs, the activity involved crypto transactions flowing through the platforms over multiple years.
The analysis focuses on transactions connected to the Islamic Revolutionary Guard Corps (IRGC), a U.S.-designated terrorist organization that plays a central role in Iran’s military, intelligence, and overseas operations. Investigators say the flows were not incidental. They formed a sustained pattern, raising questions about compliance controls at the exchanges and the broader meaning of “registration” in global crypto markets.
What Investigators Say the Data Shows
TRM Labs reported that Iran’s IRGC began moving cryptocurrency through the two platforms as early as 2023. The activity continued into 2025. During peak periods, addresses of IRGC-linked front companies accounted for a substantial share of overall trading volume. The firm stated it identified the activity by tracking transaction clustering, repeat counterparties, and wallet behavior consistent with sanctioned networks rather than retail use.
A significant portion of the flows consisted of stablecoin transactions, reflecting the IRGC’s preference for dollar-pegged assets over more volatile cryptocurrencies. Stablecoins allow sanctioned actors to move value without exposure to price swings, while maintaining liquidity across multiple platforms and jurisdictions. Investigators said the scale and consistency of the transactions suggested operational use rather than experimentation.
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Why UK Registration Became a Key Pressure Point
TRM Labs identified the platforms as Zedcex and Zedxion. Both companies are registered in the United Kingdom but not licensed or authorized to operate as crypto exchanges for UK customers. The firms do not appear on the register of approved cryptoasset businesses maintained by the Financial Conduct Authority.
That gap matters for the UK because crypto exchanges tied to Iran can use a British registration as a legitimacy signal even without FCA authorization. While the reported activity did not necessarily involve UK users, the use of UK-registered corporate entities in IRGC-linked transactions raises reputational concerns for the UK as a global financial center.
A key pressure point in the case is the distinction between company registration and regulatory authorization. Registration in the UK does not automatically imply direct supervisory oversight. Nevertheless, it carries reputational weight and creates expectations around anti-money laundering controls. The findings have renewed debate over crypto sanctions compliance. How can UK authorities realistically enforce such sanctions when companies operate globally while maintaining minimal local footprints?
A Broader Crypto Sanctions-Evasion Model Emerges
The case also fits into a wider pattern of sanctions evasion that extends beyond the use of crypto exchanges. Separate reporting by major international outlets has described how Iran-linked defense export channels have begun accepting cryptocurrency as payment for weapons sales, as part of broader efforts to bypass Western oversight. Together, the reports suggest that Iran is no longer using crypto rails as an occasional workaround. Instead, it has incorporated crypto into its sanctions-avoidance toolkit.
In this broader model, exchanges provide liquidity and access. At the same time, stablecoins enable settlement without reliance on traditional banking infrastructure. The approach lets sanctioned entities bypass correspondent banks and capital controls while maintaining functional access to global markets. Investigators say this layered structure makes enforcement more difficult, particularly when activity spans multiple jurisdictions.
Stablecoins and Transaction Rails Used in the Flows
Transaction data reviewed by TRM Labs shows that much of the activity relied on USDT transfers within the Tron network. Tron’s low transaction fees and high throughput have made it a frequent choice for large-scale stablecoin movement, including in jurisdictions facing financial restrictions. The network’s design allows high-frequency transfers at minimal cost, which can obscure oversight when paired with compliant-light platforms.
Enforcement Questions and Regulatory Gaps
The findings raise unresolved enforcement questions. Regulators must determine how long the activity went undetected and whether reporting obligations were met. More importantly, it must establish what consequences are appropriate for platforms that maintain registration in a major financial jurisdiction while facilitating sanctioned flows elsewhere. The case also highlights the limits of jurisdiction-based oversight when crypto businesses operate with globally distributed users and infrastructure.
Why This Case Extends Beyond Two Exchanges
For policymakers, the issue is not confined to the two platforms named in the investigation. The case involving these crypto exchanges linked to Iran highlights how gaps in the UK’s registration, supervision, and enforcement framework can create systemic exposure. There is no doubt that stablecoins will continue to expand as a payment infrastructure. Hence, regulators face mounting pressure to align licensing standards with real-world risk rather than formal corporate presence.
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Ultimately, the episode signals a shift in how sanctioned states use digital assets. Cryptocurrency activity linked to Iran’s IRGC appears increasingly structured, repeatable, and embedded in broader economic strategy rather than being a fringe use case. Crypto is becoming part of the financial plumbing that allows sanctioned actors to remain operational despite tightening global controls.
