Background on the Situation
Iran has been effectively isolated from the dollar-based financial system and experienced a rapid devaluation of its currency, the rial. The country’s oil revenues remain its primary source of foreign exchange, totaling an estimated $53 billion in 2023 according to the U.S. Energy Information Administration.
Cryptocurrency Activity in Iran
Investigators from the U.S. Treasury are examining whether certain cryptocurrency platforms have facilitated sanctions evasion by Iranian officials, as reported by Reuters. This scrutiny comes amidst a surge in cryptocurrency activity within Iran.
According to TRM Labs and Chainalysis, the volume of Iranian cryptocurrency transactions reached between $8 billion and $10 billion in the past year. Both state-linked groups and retail investors have turned to digital currencies, with estimates suggesting $10 billion in activity for 2024 and $7.8 billion received by Iranian wallets in 2025, per Chainalysis.
U.S. Treasury’s Investigation
Ari Redbord, global policy director at TRM Labs, stated that the U.S. Treasury is investigating whether cryptocurrency platforms have allowed state-linked actors to circumvent sanctions by moving money abroad, accessing strong currencies, or acquiring goods.
A Treasury spokesperson directed Reuters to a September announcement outlining measures against “shadow banking” networks supporting Iran, including those using cryptocurrencies to evade sanctions.
Challenges in Tracking Cryptocurrency Activity
Cryptocurrency wallet addresses are pseudonymous, making it difficult to determine who is behind transactions or their location. Investigators estimate cryptocurrency activity using data sources like web traffic and wallet addresses identified by countries such as the U.S. and Israel as linked to sanctioned entities.
Chainalysis estimates that 50% of Iran’s cryptocurrency volumes in the past year were linked to the Islamic Revolutionary Guard Corps (IRGC), a powerful political, military, and economic force closely tied to Supreme Leader Ayatollah Ali Khamenei. Meanwhile, TRM Labs estimates that 95% of Iran-related flows come from retail investors. However, TRM Labs has identified over 5,000 addresses linked to the IRGC and estimates that Guardians have moved approximately $3 billion worth of cryptocurrencies since 2023.
Elliptic, a British blockchain investigation firm, reported last month that Iran’s Central Bank, also subject to international economic sanctions like the IRGC, had acquired at least $507 million worth of USDT stablecoin in 2025, described as a “sophisticated strategy to bypass the global banking system.”
Iran’s mission to the UN did not respond to queries regarding alleged cryptocurrency use by the IRGC or Central Bank. Reuters could not independently verify the conclusions of Elliptic and other blockchain investigators.
Tether, the issuer of USDT, stated that it maintains a “zero-tolerance policy towards the illicit use of its tokens” and collaborates closely with law enforcement to identify and freeze assets linked to illegal activities.
Key Questions and Answers
- What is the main issue being investigated by the EU? The EU is investigating whether cryptocurrency platforms have assisted Iran in evading international sanctions.
- Why are investigators focusing on cryptocurrency activity in Iran? Due to U.S. sanctions, Iran has been isolated from the dollar-based financial system, leading to increased cryptocurrency usage as an alternative.
- What challenges do investigators face when tracking cryptocurrency activity? Pseudonymous wallet addresses make it difficult to identify those behind transactions and their locations.
- What are the conflicting estimates regarding cryptocurrency activity in Iran? Chainalysis and TRM Labs offer differing estimates on the proportion of cryptocurrency activity linked to state entities versus retail investors.
- What actions has the U.S. Treasury taken against shadow banking networks supporting Iran? The Treasury has announced measures targeting “shadow banking” networks, including those using cryptocurrencies to evade sanctions.
- How do cryptocurrency issuers like Tether address concerns about illicit activities? Tether claims to maintain a zero-tolerance policy and collaborate with law enforcement to freeze assets linked to illegal activities.
