U.S. Treasury examines crypto platforms for Iran sanctions evasion

U.S. authorities are examining whether cryptocurrency platforms have enabled Iranian officials and state-linked entities to evade international sanctions, according to blockchain intelligence sources cited by Reuters. The inquiry centers on whether digital asset infrastructure has been used to move funds abroad, access hard currency, or procure goods outside the dollar-based financial system.

Ari Redbord, global head of policy at blockchain analytics firm TRM Labs, said the U.S. Treasury Department is evaluating potential facilitation by crypto platforms as Iran’s digital asset usage expands. Redbord said he had direct knowledge of the Treasury’s concerns but did not identify specific platforms or jurisdictions under scrutiny.

A Treasury spokesperson referred Reuters to a September statement outlining U.S. measures targeting “shadow banking” networks linked to Iran, including structures alleged to rely on cryptocurrencies to bypass sanctions.

Iran’s Expanding Crypto Activity

Blockchain analytics firms estimate that Iran-linked crypto transaction volumes reached between $8 billion and $10 billion last year. TRM Labs places total crypto activity at roughly $10 billion, compared with $11.4 billion in 2024. 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.

While cryptocurrencies remain a relatively small component of the global financial system, the International Monetary Fund has noted that adoption is expected to rise in emerging markets with weak local currencies. Iran has been largely cut off from the dollar-based financial system and has experienced sharp depreciation of its rial, increasing incentives for alternative stores of value and payment rails.

Oil exports remain Iran’s primary source of foreign currency, generating an estimated $53 billion in 2023, according to the U.S. Energy Information Administration.

State-Linked Versus Retail Activity

Assessing the split between retail crypto usage and state-linked flows remains difficult due to the pseudonymous nature of blockchain transactions. Wallets are recorded as alphanumeric addresses, obscuring user identities and locations unless they are publicly attributed or sanctioned.

Chainalysis estimates that approximately 50% of Iran’s crypto volumes last year were linked to the Islamic Revolutionary Guard Corps (IRGC), a powerful military and economic institution subject to international sanctions. TRM Labs, by contrast, estimates that around 95% of Iran-linked crypto flows originate from retail users, though it says it has identified more than 5,000 addresses associated with the IRGC and estimates that the group has moved roughly $3 billion in crypto since 2023.

British blockchain analytics firm Elliptic reported last month that the Central Bank of Iran acquired at least $507 million worth of the stablecoin USDT in 2025, describing the activity as a coordinated effort to bypass the global banking system. Reuters said it could not independently verify Elliptic’s findings.

Iran’s mission to the United Nations did not respond to requests for comment regarding the alleged crypto usage by state institutions.

Enforcement Challenges for U.S. Authorities

U.S. officials face structural challenges in enforcing sanctions in crypto markets. Once a wallet address is publicly identified or sanctioned, users can create new wallets with minimal friction, according to Chainalysis’ head of national security intelligence, Andrew Fierman.

Tom Keatinge, director of the Centre for Finance and Security at the UK-based Royal United Services Institute, said the scale of blockchain tracing required to enforce sanctions is substantial. “It requires significant resources,” Keatinge said, describing enforcement as a continuous and fast-moving process.

Washington imposed additional sanctions on Iran last month, including measures targeting 18 individuals accused of operating shadow banking networks tied to sanctioned Iranian financial institutions.

Retail Adoption and Domestic Pressures

Alongside state-linked concerns, researchers say retail crypto adoption in Iran has accelerated due to economic instability, political unrest, and currency devaluation. Crypto activity reportedly spiked during periods of social and geopolitical tension, including protests and military escalation, before internet restrictions imposed in January curtailed access.

Nobitex, Iran’s largest cryptocurrency exchange, told Reuters that an estimated 15 million Iranians have some exposure to crypto assets, with the platform reporting around 11 million customers. The exchange said most activity originates from retail and smaller investors seeking a store of value amid continued rial depreciation.

Blockchain researchers say Iranian users can transfer funds from domestic exchanges to self-custodied wallets or international platforms. Singapore-based analytics firm Nansen reported that balances on Nobitex declined in 2025, with funds increasingly moving to international exchanges following a hack of the platform in June last year.

Nobitex acknowledged that some users may transfer crypto internationally but said it does not track transaction destinations or purposes. The exchange said it conducts transaction monitoring and that many users moved assets to self-custodied wallets as a precaution following the security breach.

Context and Implications

The Treasury’s examination reflects broader concerns among Western regulators that cryptocurrency infrastructure may be increasingly integrated into sanctions evasion strategies by isolated economies. While blockchain transparency offers investigative advantages, the speed and adaptability of wallet creation continue to complicate enforcement efforts.

As sanctions pressure on Iran intensifies and domestic economic conditions remain strained, analysts expect crypto to remain a persistent feature of both retail financial behavior and regulatory scrutiny.