The U.S. Treasury Department is investigating if cryptocurrency platforms have enabled Iran officials to evade Western-imposed sanctions, Ari Redbord, global head of policy at blockchain analytics firm TRM Labs, told CoinDesk.

Redbord said investigators are shifting enforcement away from individual digital wallets and toward crypto infrastructure,

“The concern is not simply that sanctioned actors used crypto, which is expected in a comprehensively sanctioned economy,” Redbord said. “The concern is that the activity appears concentrated through exchange-linked systems that function as repeatable financial access points for sanctioned networks.”

Redbord said U.S. authorities focus most closely when sanctions evasion efforts move from isolated wallet activity to what he described as service-layer infrastructure, including exchanges, stablecoin corridors, liquidity hubs and payment rails.

One Iranian-linked example identified by TRM Labs is Zedcex, a cryptocurrency exchange that the firm says operated as infrastructure controlled by Iran’s Islamic Revolutionary Guard Corps (IRGC). According to TRM, the exchange processed approximately $1 billion in funds linked to the IRGC, accounting for roughly 56% of its total transaction volume, with that share peaking at 87% in 2024.

“This is direct evidence of a nation state actor turning not to laundering crypto proceeds through a series of wallet addresses, but to using crypto infrastructure,” Redbord said.

Iran’s crypto transactions grew to up to $10 billion

The comments add detail to growing concern in Washington over Iran’s expanding use of digital assets. Iran’s crypto transaction volumes reached roughly $8–10 billion last year, based on on-chain activity identified by TRM Labs and Chainalysis, as both state-linked groups and retail users turned to digital currencies, Reuters reported.

Last week, the U.S. Treasury Department sanctioned cryptocurrency exchanges for operating in Iran’s financial sector for the first time. The Office of Foreign Assets Control (OFAC) announced sanctions against Zedcex and Zedxion both registered in the U.K. According to the Treasury’s statement, the exchanges facilitated transactions for the Islamic Revolutionary Guard Corps (IRGC), which the U.S. and its allies in the European Union designate as a terrorist organization. Since their registration in 2022, just one of these processed over $94 billion in transactions, the Treasury said.

The United Nations imposed sanctions on Iran in 2025, reinstating those related to the country’s nuclear program that had been lifted in 2015. It’s not the only country to resort to crypto to circumvent restrictions. In early 2025, blockchain analytics provider Chainalysis reported that U.S.-sanctioned countries had received nearly $16 billion in digital assets the year before.

Chainalysis estimates that Iranian wallets received a record $7.8 billion in 2025, up from $7.4 billion in 2024 and $3.17 billion in 2023. The firm estimates that about half of Iran’s crypto volumes last year were linked to the IRGC, a powerful military, political and economic force closely tied to Supreme Leader Ayatollah Ali Khamenei.

By contrast, TRM Labs estimated that most Iran-linked crypto flows originate from retail users, reflecting efforts by ordinary Iranians to preserve savings, access dollars and maintain connectivity to the global financial system as the rial continues to weaken.

Government officials go beyond opportunistic use

“For most people in Iran, crypto remains primarily about access,” Redbord said. But he said the threshold is crossed when state-linked actors move beyond opportunistic use and begin relying on crypto-native infrastructure designed to sustain sanctioned finance at scale.

Cryptocurrency wallets are pseudonymous and easy to create, limiting the effectiveness of sanctions that target individual addresses, Redbord said.

“By the time an address is sanctioned it has very little operational value,” he said. “Rebuilding functioning financial infrastructure is much harder.”

Sanctions enforcement in crypto, he added, is most effective when it disrupts liquidity and access rather than targeting single wallets. That includes identifying clusters of activity, mapping counterparties and exposing service providers that repeatedly facilitate the movement of funds.

As blockchain networks increasingly function as payment and settlement rails, Redbord said their use by sanctioned states will continue to evolve.

“Lawful usage will continue to dominate,” he said. “But sophisticated state actors and professional sanctions evaders will increasingly operate through specialized infrastructure built on top of those same rails.”