A sanctioned Iranian military unit moved roughly $1 billion in cryptocurrency through two UK-registered exchanges to bypass international sanctions, according to a new report from TRM Labs.
The activity highlights how digital assets are increasingly being used as an alternative financial rail outside the traditional banking system.
The report found that the exchanges, Zedcex and Zedxion, operated as a single coordinated entity and functioned as front platforms for the Iranian military organization. Between 2023 and 2025, transactions linked to the group accounted for an average of 56% of total trading volume on the two exchanges, peaking at 87% in 2024, according to TRM Labs’ analysis.
Investigators said cryptocurrency allowed the military unit to move funds across borders while avoiding controls imposed on the formal financial system. One documented transaction showed more than $10 million sent directly to a U.S.-sanctioned Houthi-linked financier, underscoring how the funds were routed to affiliated and sanctioned entities.
Most of the transactions were conducted using Tether (USDT) on the TRON blockchain, a combination frequently favored for its speed and liquidity. The report noted that stablecoins played a central role in enabling large-scale transfers without relying on correspondent banking relationships.
Corporate records reviewed by TRM Labs tied Zedxion to Babak Zanjani, an Iranian financier previously sanctioned by both the U.S. and the European Union for laundering billions of dollars in oil revenue. The findings suggest continuity between older sanctions-evasion networks and newer crypto-based infrastructure.
Despite public claims on their websites that users from sanctioned jurisdictions were prohibited and that anti-money laundering controls were in place, the exchanges continued to process transactions linked to the Iranian military unit. TRM Labs described this as a significant compliance failure, particularly given the scale and consistency of the flows.
The report concludes that digital assets have become a core component of Iran’s shadow financial system, enabling sanctioned entities to sustain operations even as pressure on traditional channels intensifies.
