Iran’s Crypto Economy Under Fire in New U.S. Sanctions Crackdown
Iran has spent years building ways to move money around the international financial system in order to circumvent international sanctions over their notorious terrorism financing exploits, nuclear program development, and human rights violations. Unfortunately, the growth in the cryptocurrency space has allowed the embattled nation to bypass these widespread international banking restrictions that previously had limited the proliferation of their illicit activity, with crypto fast becoming an increasingly important part of the Iranian government’s criminal architecture. For decades, the central challenge for Iran was moving money through banks without triggering the scrutiny of the U.S. financial system. Cryptocurrency has offered another route: value can be converted into digital assets, transferred across borders without a conventional correspondent bank and then converted back into traditional currency elsewhere. While this doesn’t make money laundering activity performed through these outlets totally invisible (given that Bitcoin and other major digital currencies operate on public blockchains where transactions are permanently recorded), it does make the identification of the entities behind individual wallet addresses far more difficult, particularly when funds pass through multiple exchanges, intermediaries and wallets.
As such, individuals acting on behalf of Tehran serve an important role in keeping any semblance of economic lifeblood available to the government to weather the storm of staunch sanctions. All told, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) estimated that approximately $9 billion in potential Iranian shadow-banking activity passed through U.S. correspondent accounts in 2024 alone as part of its Financial Trend Analysis issued last October.2 The agency also found that Iranian networks relied heavily on foreign companies and exchange houses, particularly in jurisdictions including the United Arab Emirates, Hong Kong and Singapore, to move money and obscure its origins.2
Further compounding this growing problem for international authorities, cryptocurrency has also provided ordinary businesses and individuals with an alternative financial option outside of the current Iranian economy where both inflation and currency depreciation have made conventional financial transactions increasingly challenging. Iran’s developing domestic crypto market now boasts exchanges such as Nobitex, which alone processed approximately $7.2 billion in cryptocurrency transactions in 2025 and had more than 11 million users, serving as a gateway between the Iranian rial and digital assets.1 While available as a means for ordinary Iranian citizens to conduct business and move funds in an economy largely cut off from global banking, Blockchain-analysis firm Elliptic established that Nobitex processed transactions involving wallets associated with sanctioned and Iran-linked entities, proving that the crypto-space continues to function as a legitimate sanctions-evasion tool on the country’s behalf.
To combat these developments, the U.S. Treasury Department in particular has moved to target the infrastructure surrounding Iranian financiers rather than limiting its focus solely to domestic exchanges. The latest example of this growing phenomenon came about this week as part of the Trump Administration’s whole-of-government economic campaign against the Islamic Republic of Iran and its enablers under the U.S. Treasury Department’s Operation Economic Outcast. In this operation, the Treasury sanctioned BitBank, an Iranian cryptocurrency exchange controlled by financier Babak Zanjani, alleging that the platform had facilitated hundreds of millions of dollars in Bitcoin transfers to Iran’s Islamic Revolutionary Guard Corps. Treasury also said BitBank was used to process payments connected to an Iranian authority collecting money from ships transiting the Strait of Hormuz.1 The action was the latest in a series of U.S. sanctions aimed at Zanjani’s network of digital-asset companies.
According to the Treasury Department, Zanjani was originally sentenced to death in Iran in 2016 after being convicted of embezzling millions of dollars from the National Iranian Oil Company. His sentence was later commuted in 2024, and by 2025 he had publicly re-emerged as a backer of regime-linked economic projects.1 The Treasury officially designated him and the digital-asset exchanges Zedcex and Zedxion in January 2026, alleging that addresses associated with those exchanges had processed funds linked to the IRGC. Zedcex in particular had reportedly processed more than $94 billion in transactions since its registration in 2022.4 In July, the Treasury expanded the sanctions to additional companies and individuals connected to Zanjani’s network, including firms in Iran, Turkey and the United Arab Emirates. Officials claim his network combined financial services, digital-asset trading and other businesses to move money through Iran and offshore jurisdictions to circumvent sanctions. The Treasury also alleges that between June and July 2026, Zanjani used the BitBank exchange to facilitate hundreds of millions of dollars in Bitcoin transfers to the IRGC.
As a result of these actions, all of Zanjani and his associate’s property and interests in property that are located in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50% or more by one or more blocked persons are also blocked.1 Taken together, this case illustrates how Iranian sanctions evasion is moving beyond the simple use of anonymous wallets and into an emerging model which involves exchanges, payment companies, offshore businesses, stablecoins, Bitcoin and conventional financial institutions operating alongside one another to create greater anonymity for bad actors. The Treasury’s latest sanctions demonstrate that Washington is increasingly treating this new pipeline as a concrete component of Iran’s sanctions-evasion infrastructure rather than as an independent cryptocurrency problem. It is now up to the U.S. and its international allies to identify how deeply digital assets have become embedded in the broader financial networks that are allowing Iran’s sanctioned economy to keep funds flowing.
Citations
1. Elliptic. Iranian cryptoasset outflows surge 700% following airstrikes. Published June 2026.
2. Financial Crimes Enforcement Network. FinCEN identifies $9 billion of Iranian shadow banking activity in 2024. Published October 23, 2025.
3. U.S. Department of the Treasury, Office of Foreign Assets Control. Operation Economic Outcast disrupts digital asset exchange enabling the Iranian regime. Published September 17, 2026.
4. U.S. Department of the Treasury, Office of Foreign Assets Control. Treasury sanctions Iranian regime officials for violent repression and corruption. Published January 30, 2026.