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U.S. Investigations into Iranian Crypto Platforms

By Elizabeth Howcroft and Tommy Reggiori Wilkes

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Overview of Investigations

PARIS/LONDON, Feb 3 (Reuters) – Recent insights from a blockchain researcher indicate that U.S. investigators are delving into specific cryptocurrency platforms suspected of enabling sanctions evasion by Iranian officials. This investigation comes as cryptocurrency activity surges in the Islamic Republic, suggesting a complex relationship between digital currencies and economic restrictions.

Rising Crypto Transaction Volumes in Iran

Iran’s cryptocurrency transaction volumes are estimated to have reached an impressive $8-10 billion last year. This increase in activity is attributed to both state-linked entities and retail investors alike embracing digital currencies as alternatives to traditional financial systems. Research firms such as TRM Labs and Chainalysis highlight this notable trend amidst the turbulent economic landscape facing Iran.

U.S. Treasury’s Focus on Evasion Tactics

The U.S. Treasury is now actively assessing whether certain crypto platforms have inadvertently facilitated state-linked actors in evading sanctions designed to inhibit their financial movements. Ari Redbord, the global head of policy at TRM Labs, noted that he possesses direct knowledge concerning the concerns expressed by the Treasury regarding this matter. These investigations point to a potential intersection of innovative finance and international regulatory frameworks.

Public Statements from the Treasury

A spokesperson for the U.S. Treasury referenced a statement made in September, which outlined measures taken against "shadow banking" networks believed to be supporting Iranian financial activities that contravene U.S. policies. These measures specifically mention the use of cryptocurrency to evade sanctions, highlighting the urgent nature of the situation.

Unidentified Crypto Platforms Under Scrutiny

While Redbord has not identified any specific cryptocurrency platforms currently under investigation, the implications of these probes are significant for the global crypto landscape. The U.S. Treasury’s focus raises questions about the level of accountability that these platforms must uphold regarding compliance with international laws and sanctions.

Estimates of Crypto Activity in Iran

According to TRM Labs, crypto-related activity in Iran was around $10 billion last year, with predictions for 2024 estimating it could reach $11.4 billion. Chainalysis reported that Iranian wallets experienced a record influx of $7.8 billion in 2025, rising from $7.4 billion in 2024 and a mere $3.17 billion in 2023. This upward trend reflects a growing reliance on cryptocurrencies within the country.

Lack of Response from Iran

Despite the rising scrutiny and investigations, Iran’s mission to the United Nations has not responded to inquiries requesting comments regarding these findings. The silence underscores the complexity of the geopolitical environment and the challenges in establishing transparent communication.

The Role of Cryptocurrencies in the Global Economy

While cryptocurrencies currently constitute a minor fraction of the global financial system, their use is projected to expand, particularly in emerging markets grappling with economic instability and weak currencies. The International Monetary Fund has acknowledged this trend, suggesting that countries like Iran are increasingly adopting cryptocurrencies due to the limitations imposed by their exclusion from the dollar-based financial system. The Iranian rial has seen dramatic devaluation, pushing citizens and institutions toward digital currency alternatives.

Consequences of Enhanced Economic Pressure

Tom Keatinge, director at the Royal United Services Institute, emphasizes that tightening economic pressures on Iran will have multifaceted consequences, one of which is the accelerated adoption of cryptocurrencies. Such measures may provoke unintended outcomes that exacerbate the challenges faced by global authorities.

Ongoing Crises in Iran

Iran faces a multitude of crises, including a recent 12-day conflict with Israel and various military actions targeting its nuclear facilities. Coupled with a recent surge of anti-government demonstrations and subsequent crackdowns, these situations have drawn attention from U.S. officials, potentially leading to further actions against Iranian financial mechanisms.

Sanctions and Implications for Iranian Finance

In late January, Washington introduced new sanctions aimed at 18 individuals alleged to be affiliated with shadow banking networks tied to sanctioned Iranian financial institutions. The push to monitor and control these networks reflects the growing concern over the intricate interplay between digital currencies and state-actor financing.

Challenges in Tracking Crypto Transactions

The pseudonymous nature of cryptocurrency wallet addresses complicates efforts to track transactions and identify involved parties. Analysts have assessed crypto activity through web traffic data and recognized wallet addresses attributed to nations like the U.S. and Israel, which are linked to individuals under sanctions.

The Complexity of Iranian Crypto Landscape

Researchers assert that gaining a comprehensive picture of crypto use in Iran is nearly impossible. Discrepancies in estimates regarding state-linked versus retail trading abound, with Chainalysis suggesting that around 50% of Iran’s crypto volume last year was associated with the Islamic Revolutionary Guard Corps (IRGC). In contrast, TRM Labs claims that a staggering 95% originated from retail investors, emphasizing the divergent perspectives on this pivotal issue.

Increasing Evidence of State Involvement

Even though volumes attributed to retail investors are significant, TRM Labs indicates that more than 5,000 wallet addresses are linked to the IRGC, which has allegedly moved approximately $3 billion in crypto assets since 2023. Such findings underline the complexity of the Iranian market, where state and non-state actors intermingle.

Central Bank’s Crypto Activities

Recently, British blockchain research firm Elliptic reported that the Central Bank of Iran, also subject to sanctions, acquired at least $507 million in USDT stablecoins in a bid to bypass the global banking system. Such maneuvers highlight the ongoing sophistication in sanctions evasion tactics employed by Iranian authorities.

Questions Remain about Alleged Crypto Use

Despite the gravity of these allegations, Iran’s UN mission has remained tight-lipped about its government’s potential crypto-related activities. Independent validation of findings from researchers like Elliptic remains elusive, casting uncertainty on the broader implications of these reports.

Tether’s Stance on Compliance

Tether, the issuer of USDT, clarified its strong policy against the misuse of its tokens for illicit purposes, stressing its cooperation with law enforcement to freeze assets connected to illegal activities. Tether’s proactive stance underlines the ongoing adaptability of cryptocurrency entities to regulatory challenges.

Navigating the Evolving Landscape

Andrew Fierman, Chainalysis’ head of national security intelligence, raised concerns about the difficulty facing U.S. authorities. Once a crypto wallet is publicly identified or sanctioned, its owners can easily create new ones, making it increasingly challenging to track illicit transactions.

The Scale of the Challenge

Keatinge points out that the extensive resources required for blockchain tracing and subsequent sanctioning efforts mean that U.S. authorities are engaged in a high-speed "whack-a-mole" scenario, where each action generates potential evasive responses within the crypto ecosystem.

Iran’s Growing Crypto User Base

As of now, approximately 15 million Iranians are estimated to have engaged with cryptocurrencies, according to industry insights gathered from Nobitex, Iran’s leading exchange platform. The exchange reported having 11 million users, with retail investors constituting the bulk of activity. Many individuals utilize cryptocurrencies primarily as a hedge against the depreciation of the rial.

Cross-Border Transfer Capabilities

Blockchain experts assert that Iranians can transfer funds from local exchanges to wallets and platforms situated outside their country, offering an escape route from restrictive financial measures.

Notable Trends in Fund Movements

Research from Singapore-based firm Nansen reveals that some Iranians have initiated withdrawals from Nobitex in the last year, noting significant declines in major cryptocurrency balances since reaching mid-year highs. The anti-Iranian hacking group’s attack last June further compounded the exchanges’ challenges.

The Shift to International Exchanges

Nansen identified hundreds of thousands of dollars’ worth of crypto that were shifted from Nobitex to international exchanges in 2025, suggesting that these assets did not vacate the crypto ecosystem entirely but rather transitioned to platforms located abroad.

Conclusion and Future Outlook

Overall, the data indicates that cryptocurrency has functioned as a gradual exit strategy for individuals in Iran over the past year. Nobitex acknowledges that while some users may employ crypto for cross-border transactions, they do not track the specific purposes or destinations of these transactions.

In light of these evolving issues, AI legalese decoder emerges as a vital resource for individuals and entities striving to navigate the complexities of financial regulations and compliance matters. By providing intuitive translations of legal jargon, this tool empowers users to better understand their obligations and rights in an increasingly scrutinized space, ultimately facilitating informed decision-making concerning their financial activities.

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Reporting by Elizabeth Howcroft and Tommy Reggiori Wilkes; Additional reporting by Tom Wilson and Parisa Hafezi; Editing by Pravin Char

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