A British corporate front for sanctioned finance
Two companies registered in the United Kingdom were used to move more than $1 billion in stablecoins on behalf of Iran’s Islamic Revolutionary Guard Corps (IRGC), according to a detailed blockchain investigation published by TRM Labs.
The findings matter well beyond the UK. They illustrate how global crypto infrastructure, even when anchored in a major financial jurisdiction, can be quietly repurposed to sustain the financial operations of a heavily sanctioned state actor, largely outside the reach of traditional controls.
According to TRM Labs, the activity took place between 2023 and 2025 and relied primarily on Tether’s USDT stablecoin, mostly issued on the TRON network. The choice was not accidental. USDT offers dollar-like stability, deep liquidity, and fast, low-cost transfers, making it well-suited for high-volume international flows that would struggle to move through the banking system.
How the network operated
The two firms, Zedcex Exchange Ltd and Zedxion Exchange Ltd, were formally separate UK-registered entities. On-chain analysis, however, showed that they effectively operated as a single platform, sharing wallet infrastructure, transaction flows, and operational control.
TRM Labs estimates that wallets linked to the IRGC accounted for more than half of the platforms’ total transaction volume over the period studied, rising to almost 90 percent during parts of 2024. Funds moved in a constant loop between Iranian-linked wallets, offshore intermediaries, and the UK-registered exchange infrastructure, creating what investigators describe as a purpose-built financial corridor.
Crucially, this was not a case of occasional illicit use of an otherwise compliant exchange. The data suggest that servicing sanctioned Iranian actors was central to the platforms’ economic activity.
Stablecoins as a sanctions infrastructure
The investigation underscores a broader shift in how sanctions evasion works in the digital age. Rather than relying on complex trade-based schemes or opaque correspondent banking chains, sanctioned entities can now use stablecoins as functional substitutes for offshore dollar accounts.
In this case, USDT acted as programmable, censorship-resistant working capital. Transactions could be split, rerouted, and recombined across hundreds of wallets with minimal friction, while remaining visible on-chain but difficult to stop in real time without coordinated action from issuers, exchanges, and regulators.
TRM Labs also identified links between the network and individuals previously associated with Iranian sanctions-evasion efforts, including figures connected to energy trading and regional proxy financing. Some funds were traced onward to wallets linked to sanctioned actors outside Iran, pointing to a wider regional role for the network.
Why Europe should pay attention
That the companies were registered in the UK is significant, but the implications extend across Europe. Corporate registration, beneficial ownership checks, and crypto supervision remain uneven across jurisdictions, creating entry points for abuse even in countries with strong financial reputations.
For policymakers, the case highlights a growing gap between traditional anti-money-laundering frameworks and the realities of blockchain-based finance. Compliance regimes built around banks and payment institutions struggle when the infrastructure itself, wallets, smart contracts, and stablecoin rails, becomes the primary financial system.
It also raises uncomfortable questions for stablecoin oversight. While transactions are transparent, enforcement depends on timely attribution, cooperation from issuers, and clear legal authority to intervene. When those elements lag, sanctioned actors can operate at scale in plain sight.
What comes next
The TRM Labs report is likely to intensify scrutiny of crypto company registrations, exchange licensing, and stablecoin governance in Europe and the UK. It may also feed into ongoing debates over whether stablecoin issuers should be required to embed stronger, more proactive controls at the protocol or issuance level.
More broadly, the case serves as a warning. As Europe debates the future role of public and private digital money, including the digital euro, the alternative systems already in use are evolving quickly. Without credible oversight, they can be weaponised just as efficiently as they can be innovated.
Related: UK Crypto Firms Face September 2026 Deadline as FCA Licensing Gateway Opens