Iran's encrypted migration route

Author: danny

If you want to understand how the Iranian government uses cryptocurrency and the crypto industry to deceive the public, how Iranian residents use cryptocurrency despite numerous restrictions, where did the 80 tons of imported gold go, and where large sums of money actually flowed, this article will tell you everything.

Nearly half a century ago, Iran experienced a massive transfer of wealth that shook the global financial system. In early 1979, the Pahlavi dynasty, which had ruled Iran for 37 years, collapsed amid the fury and social upheaval of the Islamic Revolution. This revolution not only ended Iran's 2,500-year-old monarchical tradition but also triggered the largest and most dramatic class restructuring and capital flight in modern Middle Eastern history.

The clock has ticked to March 2026. As the United States and Israel launched an unprecedented joint military strike against Iran, resulting in the deaths of Iran's top leaders and the destruction of key military infrastructure, a similar doomsday panic has once again spread across the land.

Introduction: Echoes of History

In early 1979, the air in Tehran was thick with the smell of burning tires and an overwhelming sense of dread. For families like Regine Monavar Tessone, living in Tehran's affluent neighborhoods, the revolution meant the complete wipeout of generations of accumulated wealth overnight.

In Regine's memory, that morning was filled with despair and chaos. Her father, sweating profusely, crammed twelve enormous suitcases into the car, even tying them to the roof. When Regine's mother tried to run back into the house to retrieve a few more precious silver items and copper plates, her father erupted in a desperate roar, warning them that "there was no time left." On the way to Mehrabad Airport, the car, laden with valuables, suffered a tire blowout due to overloading. In that life-or-death moment, her father gave everything he had to a passing stranger, begging to get his family to the airport on time. They were incredibly lucky to catch the last civilian airliner leaving Iran before the airport closed.

As their flight struggled to take off, the captain announced a chilling message over the intercom: "You are lucky; this is the last flight out of Iran. The airport is officially closed, and Khomeini has returned to Iran!" Regine's mother warned her children never to look back, for they would never set foot on this land again. The real estate, businesses, and various tangible assets they left behind ultimately fell into the hands of the new regime, becoming dust in the annals of history.

For Iranian tycoons who, for various reasons, were unable or unwilling to flee in time, the price was often devastating. Habib Elghanian, a prominent businessman known as a "Tehran business magnate," is a prime example of this tragedy. He was a key figure in Iran's modernization, his family constructing Iran's first privately owned high-rise building—the iconic 17-story Plasco Building—and introducing a significant amount of advanced Western technology. However, after the 1979 Islamic Revolution, he was swiftly arrested and sentenced to death by the Islamic Revolutionary Court on trumped-up charges of espionage, corruption, and "friendship with the enemies of God." He was executed by firing squad, becoming the first business leader to be executed by the new regime.

In those days, wealth transfers were conducted in a physical, primitive, and life-threatening manner. To evade the new regime's confiscation and liquidation of assets from the old dynasty's dependents and wealthy classes, Iran's rich and middle class went to great lengths to miniaturize and conceal their wealth. Some transported priceless Persian antique carpets from the old capital Tabriz by camel and truck to secluded ports in the southwest, where they were loaded onto small wooden sailboats under the cover of night and smuggled across the Persian Gulf to markets in the United Arab Emirates or Africa. Others went to great lengths to sew gold and jewelry into the linings of clothing, or hide them in cut toothpaste tubes or hollowed-out soap bars, risking being double-crossed and killed by armed Afghan smugglers in the Golden Crescent region, to transfer hard currency out of the country through land-based cross-border smuggling networks. Rumors also circulate that Jacek, a Polish smuggling ringleader based in Singapore, employed a vast transnational network of messengers, including Vietnam War veterans, former Israeli fighter pilots, and French backpackers, to smuggle large quantities of gold into India and the Middle East via human smuggling, providing a secret channel for wealthy individuals in the turbulent Middle East to transfer assets at the time.

Nearly half a century later, the clock has ticked to March 2026. As the United States and Israel launched a joint military strike against Iran, resulting in the deaths of Iran's top leaders and the destruction of key military infrastructure, a similar doomsday panic has once again spread across the land.

Reading Guide: This article is over 12,000 words long. We suggest you read it patiently. You deserve it.

I. The Crucible of Macroeconomics: War Expectations, Systemic Imbalances, and the Collapse of the Rial

From 2024 to early 2026, Iran's economy suffered a complete economic collapse due to a combination of factors, including long-term structural imbalances, elite corruption, massive quasi-fiscal monetary over-issuance, the heavy pressure of international sanctions, and geopolitical shock. The US government's relaunch of the Maximum Pressure campaign in February 2025 through National Security Presidential Memorandum 2 (NSPM-2), along with Israel's continued military threats, completely shattered the last vestiges of public confidence in the Iranian rial.

Result: Ultimate devaluation of the monetary system and credit bankruptcy

On the eve of the twelve-day conflict between Iran and Israel in June 2025, one US dollar could be exchanged for approximately 800,000 rials on the open market. However, with political instability, escalating external military threats, and tightening sanctions, the rial's exchange rate plummeted in the following months. By the end of January 2026, the rial's exchange rate against the US dollar (referring to the black market rate) had crashed to 1,620,000 rials to one US dollar, meaning that the Iranian currency had lost nearly half its purchasing power in just six months.

This led to almost all business activities, pricing strategies, and savings plans becoming pegged to the black market price of the US dollar. Due to the drastic reduction in the physical purchasing power of banknotes, everyday cash transactions became extremely difficult. In February 2026, the Central Bank of Iran (CBI) was forced to inject and issue the "Iran-cheque," a 5,000,000 rial note, as its largest denomination of circulating banknote. However, this seems more like a dark joke today: while it is the largest denomination banknote ever issued in Iranian history, its actual purchasing power is only about $3.10.

II. External extreme suppression is merely a trigger; the breeding ground for institutionalized corruption: the distorted eight-track foreign exchange system.

In normal market economies, currency devaluation often automatically adjusts the balance of payments by reducing export costs. However, in Iran, this mechanism is completely distorted by the extremely complex and fragmented multi-track foreign exchange system constructed by the government. To control the outflow of limited foreign exchange reserves under sanctions, maintain imports of basic necessities, and provide rent-seeking opportunities for the privileged class, the Central Bank of Iran has long maintained an absurd multiple exchange rate system. As of the end of 2024-2025, as many as eight different US dollar exchange rates were operating in parallel in the Iranian economy, with the four core exchange rates shown in the table below:

This enormous difference between the official and black market exchange rates constitutes an institutionalized arbitrage space unprecedented in human economic history. In early 2024, the gap between the NIMA and black market rates reached a staggering 52%, meaning that any exporter forced to settle accounts within the NIMA system was effectively stripped of more than half of their asset value. Conversely, quasi-state-owned enterprises or privileged oligarchs with connections to high-ranking government officials and affiliated with the Islamic Revolutionary Guard Corps (IRGC) could easily defraud the central bank of hundreds of millions of US dollars at extremely low preferential exchange rates (such as 280,000 riyals) by falsifying import invoices (e.g., falsely claiming to import life-saving medicines or industrial machinery). These companies then did not import any physical goods; instead, they directly sold these dollars on the black market at a market price of 1,600,000 riyals, instantly reaping risk-free profits several times over.

This dual exchange rate system and trade mitivoicing are the root causes of the severe anemia in Iran's real economy. According to data disclosed by Hossein Samsami, a member of the Iranian parliament's economic committee, a staggering $95 billion in non-oil export revenue "never returned to Iran" between 2018 and mid-2025. Central bank data shows that approximately $80 billion was lost through foreign trade between 2018 and 2024, while the private sector accounts for only 15% of total foreign trade. This undoubtedly points the finger at vested interest groups with government backing.

Faced with the completely ineffective NIMA system, Iran's Minister of Economy attempted to unify the exchange rate by the end of 2025, allowing importers and exporters to trade based on an agreed-upon rate. However, given extremely fragile confidence, this reform was interpreted by the market as a signal that the government was "completely abandoning foreign exchange controls," triggering a new round of panic-driven inflationary expectations and causing the black market dollar exchange rate to surge again, exceeding 900,000 rials by the end of 2025.

Regarding the country's foreign exchange earnings, although Iran has been attempting to covertly sell sanctioned oil to Asian markets (especially small refineries in China) at heavily discounted prices through a "ghost fleet" and a complex financial network, its actual revenue continues to plummet due to US sanctions. According to data from the Central Bank of Iran, in the first half of the fiscal year beginning March 21, 2025, the nominal book value of Iranian oil exports fell by approximately 10%, to $30.7 billion. The government's fiscal deficit has forced it to continuously print money, further exacerbating the vicious cycle of hyperinflation and currency devaluation.

III. Complete Closure of Legitimate Hedging Channels: Extreme Regulation of the Foreign Exchange and Gold Markets

Faced with a known and irreversible massive currency devaluation and the imminent threat of war, the first reaction of any rational wealthy individual, middle-class person, or even ordinary citizen would be to exchange their local currency for hard currency (such as the US dollar or euro) or traditional safe-haven precious metals (such as gold). However, in Iran in 2026, this traditional path to preserving asset value has long been completely blocked by the government through strict foreign exchange controls and physical restrictions. This is also the core driving force behind the massive influx of funds into underground networks and the cryptocurrency market.

3.1 The "physical segregation" of foreign exchange withdrawals and multiple exchange rate traps

As mentioned above, Iran operates an extremely complex, distorted, and highly fragmented multiple exchange rate system.

Every time the gap between the official and black market exchange rates widens significantly, it creates enormous opportunities for rent-seeking and systemic corruption. Those within the system acquire foreign exchange through official channels at extremely low subsidized rates, then resell it on the black market for arbitrage, while ordinary citizens are completely excluded from this chain of interests. For ordinary people, exchanging dollars through legitimate banking channels at the official rate is virtually impossible, as the central bank's foreign exchange reserves are already stretched thin, prioritizing the import of strategic national resources and military spending.

Even more devastatingly, to prevent a catastrophic bank run and to curb foreign exchange trading on the black market, the Iranian government imposed extremely strict physical restrictions on cash flow. Due to a severe shortage of paper money, major bank branches set an informal daily withdrawal limit of 30 to 50 million rials (approximately US$18 to US$30) for ordinary customers. At ATMs, the maximum daily withdrawal was limited to 3 million rials (approximately US$1.83).

In addition, the Central Bank of Iran has implemented annual limits on money transfers. The annual total transaction limit for salaried individuals is capped at 200 billion rials (approximately US$154,000), while the annual limit for unemployed individuals is only 50 billion rials (approximately US$38,400), and the limit for idle corporate accounts is even lower at 5 billion rials (approximately US$3,840). Meanwhile, the central bank has deployed a robust anti-money laundering monitoring system. In a single operation at the end of 2025, it blocked approximately 6,000 bank accounts belonging to more than 250 individuals suspected of "disrupting the foreign exchange market," freezing funds totaling US$160 million.

3.2 The Abnormal Prosperity of the Gold Market and Policy Encirclement

With hard currencies like the US dollar in short supply, gold naturally became the second choice for all levels of society. For a long time, the Bahar Azadi (meaning 'Spring of Freedom') gold coin issued by the Central Bank of Iran has been the preferred tool for private savings and hedging against inflation.

Iran's gold market has now evolved into a highly distorted trap, riddled with premium bubbles and facing extremely high policy risks.

According to data from the Iranian domestic market in early March 2026, although the international spot gold price remained stable (approximately US$5,357 per ounce), gold coins of different denominations in the Iranian market all showed a significant premium.

This artificially created massive supply shortage, coupled with panic buying by the public, led to an astonishing premium bubble in gold coin prices. The price of the full-strength coin was too high (over 2.1 billion riyals), exceeding the purchasing power of most middle-class individuals, and therefore its price was roughly in line with the actual value of gold. The "quarter coin," with its lowest price and easiest accessibility, became the object of desperate buying by the middle class and even the lower classes. This enormous and desperate demand from the lower classes artificially inflated its market price by as much as 13.82%.

On the one hand, the supply of gold is highly controlled by the government. Although the Iranian government introduced policies between 2024 and 2025 to circumvent US-led international banking sanctions, allowing and encouraging exporters to directly import gold bars using their overseas foreign exchange earnings (according to data from the World Gold Council and customs, Iran's gold imports surged to over 100 tons in 2024, with a total value exceeding $8 billion), customs data reveals a startling fact: of the approximately 81 tons of imported gold, only about one-third (approximately 20 tons) was minted into coins or bars and released into the consumer market. The remaining 61 tons are unaccounted for, most likely intercepted and annexed by the Central Bank of Iran, or used for black market trading by certain individuals. (This is important; it will be on the test later.)

On the other hand, to curb the public's conversion of funds into gold hoarding and further weaken the status of legal tender, the Iranian parliament and tax authorities launched a fierce policy crackdown on the gold market. In August 2025, Iran officially promulgated and implemented the "Speculation and Profiteering Tax Law," which explicitly lists gold, foreign exchange, real estate, and cryptocurrencies as four major speculative assets and announced the imposition of high capital gains taxes on transactions of these assets. At a deeper socio-cultural level, to curb the rigid demand for physical gold, the Iranian parliament even passed a highly controversial bill in December 2025, stipulating that the number of legally enforceable gold coins in traditional Islamic marriage dowries (Mahrieh) cannot exceed 14, and any excess will no longer be protected by law.

With restrictions on dollar withdrawals, heavy taxes on gold and exorbitant premiums, and the constant threat of customs confiscation of physical assets leaving the country, traditional routes for asset preservation and transfer have been completely blocked. This has forced Iran's wealthy, entrepreneurs, and desperate middle class to turn their attention to cryptocurrencies and digital assets, currently the only asset class in the world that is borderless, censorship-resistant, and highly liquid.

But is cryptocurrency another safe haven?

IV. Domestic Crypto Exchanges: "Pressure Valves" and Traps Dancing on a Tightrope

Faced with a long-term economic blockade, Iran was actually one of the earliest regimes in the world to venture into the cryptocurrency field at the national strategic level. As early as 2019, in the face of increasingly severe sanctions, the Iranian government officially legalized Bitcoin mining. The core logic is to use cheap electricity, heavily subsidized by the government, for mining, directly converting surplus energy into digital assets that can circulate on the international market, thereby using it as a macro tool to earn foreign exchange, circumvent US financial blockade, and finance imported goods.

At its peak, Iran's hashrate accounted for 2% to 5% of the global Bitcoin hashrate. Furthermore, an Elliptic report indicates that the Central Bank of Iran systematically stockpiled at least $507 million worth of USDT in the market over the past few years through a complex network of interconnected wallets. This was an attempt to use the dollar-backed stablecoin to conduct open market operations, thereby supporting the plummeting rial exchange rate and circumventing SWIFT blocking. (This will be discussed in more detail later.)

Domestically, cryptocurrency trading has also experienced explosive growth. Local cryptocurrency exchanges, with Nobitex as the undisputed leader, along with platforms such as Wallex, Bitpin, Aban Tether, and Ramzinex, have quickly become lifelines for millions of Iranians accessing the global financial system. According to official data from Nobitex, approximately 15 million people in Iran have had some level of exposure to cryptocurrencies.

Nobitex dominates Iran's crypto ecosystem, handling over 87% of the country's cryptocurrency transaction inflows, with a staggering $3 billion processed in just a few months during the first half of 2025. In terms of specific asset preferences, TRC-20 USDT serves as the core bridge for Iranians to exchange the ever-depreciating fiat rial for "digital dollars," accounting for the vast majority of transactions.

The iron fist of close surveillance and encrypted curfews

However, for Iranian millionaires and middle-class individuals genuinely seeking to transfer substantial wealth abroad, these domestic cryptocurrency exchanges have never been safe havens. Instead, they are cryptocurrency transaction records monitored by the Central Bank of Iran, the Ministry of Intelligence, and the Islamic Revolutionary Guard Corps (IRGC).

Under Iranian regulations, all legitimate domestic cryptocurrency exchanges must obtain an operating license from the central bank and are required to implement KYC (Know Your Customer) verification procedures that are as stringent as, or even more stringent than, international standards. Crucially, these platforms must provide the central bank with a fully transparent interface to their transaction data. As long as digital assets and funds remain within Iran's control (i.e., circulating within domestic exchanges or used for government-approved import trade), the regime tacitly approves or even encourages their existence. However, when fund flows show a clear intention to move overseas or threaten the country's foreign exchange reserves, the regulatory crackdown will be ruthless.

On June 18, 2025, a pro-Israel hacking group called "Predatory Sparrow" launched an attack on Nobitex, emptying its hot wallet of various crypto assets worth between $90 million and $100 million. (The day before the attack on Nobitex, the group also paralyzed the system of Iran's state-owned bank, Bank Sepah, causing ATMs across the country to crash.)

This catastrophic event severely damaged Iran's already weak digital financial infrastructure. In response, the Central Bank of Iran quickly introduced a series of measures:

• Mandatory "Crypto Curfew": The central bank has mandated that all domestic cryptocurrency exchanges strictly limit their operating and trading hours to between 10:00 AM and 8:00 PM daily. While the official reason given is to reduce the risk of overseas hacker attacks during off-peak hours, Chainalysis points out that the real intention behind this measure is to cut off the 24/7 liquidity of the crypto market, allowing regulators to focus their efforts during working hours on curbing asset outflows and capital flight.

• Double red line limits for trading and holding: In September 2025, in response to a new round of currency collapse, the Supreme Council of the Central Bank of Iran urgently announced restrictions: the cumulative amount of USDT purchased by each Iranian citizen on licensed exchanges was set at no more than $5,000 per year, and the total amount of stablecoins held in an individual account could not exceed $10,000.

• "Pulling the Net Cable" Operation Under Extreme Crisis: In early March 2026, with the outbreak of the joint military strike by the United States and Israel, in order to slow down the repricing speed of the fiat currency rial under extreme panic and forcibly curb the exchange run, the Central Bank of Iran directly issued an administrative order requiring major platforms such as Nobitex, Wallex, and Bitpin to suspend USDT and rial trading indefinitely, completely cutting off the main channel for exchanging domestic fiat currency for cryptocurrency stablecoins.

Under this comprehensive blockade and tight monitoring, encompassing time, quotas, and trading pairs, let alone Iranian tycoons, any ordinary person who naively believes they can simply register a Nobitex account in Iran and exchange billions of rials in their bank accounts for Bitcoin is undoubtedly walking into a trap. Not only is the annual $5,000 exchange quota limited, but any assets purchased can also be frozen at any time by the central bank on the grounds of "disrupting economic order."

Therefore, transferring funds overseas before the outbreak of war is a dead end for anyone other than a high-ranking individual. So, the large transfers you see from Nobitex are definitely not an escape route for ordinary people.

V. Hawala System: A "Shadow Liquidator" Based on Clan Trust

Hawala is a long-standing, widespread informal money transfer and value transfer system in the Middle East and South Asia. Completely outside the formal modern commercial banking network and the SWIFT system, its core operating logic is built on clan ties, a sense of honor, and extremely high levels of interpersonal trust. For Iranians attempting to safely transfer funds to Turkey or the UAE, Hawala's operating mechanism perfectly bypasses OFAC's radar.

A typical "Iranian-style" Hawala cross-border fund transfer process is as follows:

• Local investment: Iranian businessmen or middle-class families attempting to flee their capital entrust bundles of rials in cash or gold, or transfer funds in multiple unrelated accounts, to a local Hawaladar (money broker) in a secluded corner of the Grand Bazaar in Tehran.

• Password generation or wallet transfer: After calculating the amount, the agent charges a service fee and an exchange rate spread. Because the black market exchange rate is far higher than the official rate, the agent can profit handsomely from the exchange rate difference. The agent then directly transfers USDT to the user's designated wallet address, or provides the client with a specific password, code, or codeword. Simultaneously, the agent in Tehran contacts their counterparts in Dubai, UAE, or Istanbul, Turkey, using encrypted communication software such as Telegram or Signal.

• Remote withdrawal: The client (traveling abroad on a valid tourist visa) or their relative overseas can travel to a designated transaction location in Dubai and simply provide the password. The overseas agent will then hand over the equivalent amount of AED or USD in cash to the client.

• Shadow accounting: Throughout the entire fund transfer process, no actual funds are physically transferred across borders electronically or moved across cash. The creditor-debtor relationship between the agents in Tehran and Dubai will be settled in the future through extremely covert methods.

Settlement methods include, but are not limited to: offsetting reverse remittances, underreporting/overreporting invoices in commodity trade (for example, a shipment of dried fruit exported from Iran to the UAE has its customs value deliberately overstated, and the extra proceeds are used to offset Hawala's debt), or, more commonly in modern times, using cryptocurrencies directly for final accounting.

Despite its extreme flexibility and difficulty in tracking, the Hawala system faces a balancing act regarding two-way capital flows during the current Iranian crisis. Amidst the extreme panic of impending war, capital is overwhelmingly flowing out in one direction (i.e., everyone wants to transfer money from Tehran to Dubai, but almost no one wants to transfer it back). This has led to the rapid depletion of the dollar pool in Dubai's Hawaladar, while Tehran's proxies are accumulating rapidly depreciating rials. Therefore, starting in the latter half of 2025, Tehran's proxies shifted from cash rials to gold (or Bahar Azadi gold coins). This explains why, of the aforementioned imported gold, only about one-third was minted into coins or released into the consumer market; the other two-thirds...

VI. The Dual Faces of Global Money Laundering Corridors and State Mechanisms: The Ultimate Destination of Hidden Assets

Whether through the ancient Hawala settlement system or USDT transmitted via fiber optics, funds fleeing Iran ultimately need to undergo legal confirmation of ownership and final settlement in the physical world. Caught in the cracks of Western financial sanctions, Iran's privileged capital flight has woven a highly professional and intricately intertwined "transfer and settlement corridor." Even more absurdly, the very state apparatus that brutally suppresses capital flight from its own borders and champions anti-American rhetoric is itself the biggest player and ultimate beneficiary of this global underground money laundering network.

The Istanbul-Toronto-Dubai Corridor: A Global Asset Allocation Map for Iranian Elites

For Iran's elite and super-rich, capital flight is merely the first step; the ultimate goal is to launder assets and obtain legitimate Western citizenship. This objective has spurred the highly efficient "Istanbul-Toronto-Dubai" triangle corridor.

Dubai, UAE

Despite facing immense diplomatic pressure from the US Treasury and the FATF to dismantle Iran's money laundering networks, Dubai, with its tax haven status, remains the most important hub for "Iranian-style" capital flight. Iranian-affiliated entities operating in the Dubai Free Trade Zone (such as Petro Grand FZE, tracked by Forensic Ledger), ostensibly engaged in importing textile machinery or trading everyday commodities, actually act as massive shadow banks. Large amounts of hedging funds entering through Hawaii, or USDT laundered through DEXs, are converted here into legitimate commercial credit or stable UAE dirhams. Dubai's real estate market has long absorbed massive amounts of Iranian capital.

Istanbul, Turkey

As Iran's neighbor, Turkey, with its unique geographical location and relatively pragmatic (relaxed) financial regulations, has become the biggest national beneficiary of this massive wealth transfer. Ankara attracted a massive influx of fleeing Iranian capital through its popular "citizenship by investment" program. Wealthy Iranians, by purchasing high-premium real estate in Istanbul, not only successfully converted the worthless rial into hard currency assets, but more importantly, directly obtained Turkish passports. This new passport became their "golden key" to legally accessing the Western financial system and establishing offshore trusts. Intelligence agencies estimate that Turkey legally earns up to $2.8 billion annually in "sanctions rent" and service fees from various financial transactions, bridge loans, and intermediary services in Iran alone. In addition, a large number of "ghost fleet" shell companies registered in the Marshall Islands but with their actual operating offices in Istanbul were also deeply involved in transporting sanctioned oil for the National Iranian Oil Company (NIOC) in exchange for black market foreign exchange. The US State Department imposed severe sanctions on this network in January 2026. (Note: The ghost fleet is one of Iran's means of generating foreign exchange, referring to the sale of its oil, which is subject to US embargo, to other countries.)

Furthermore, Iranians have consistently ranked among the top three most active foreign buyers in the Turkish real estate market. For example, in September 2025, despite a decline in Turkish residential sales, Iranian citizens still purchased 202 homes in Turkey. International real estate analysis agencies estimate that as much as $70 billion of Iranian capital has flowed into the Turkish real estate market in recent years, significantly supporting local market demand. This massive $70 billion is essentially the final destination of Iranian national capital that has been continuously fleeing through the aforementioned havara system and encrypted channels.

Toronto, Canada

For the elite and wealthy individuals who have successfully obtained Turkish citizenship, North America (especially the luxury housing market in Toronto, Ontario, Canada) is the ultimate destination for their wealth. Despite the Canadian federal government's extremely tough diplomatic stance towards the Iranian regime, designating the Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization, Toronto's highly developed professional services industry (comprising high-end law firms, tax accountants, and top real estate agents) has profited handsomely from this surge of Iranian "capital flight," building a comprehensive compliance and legal services industry chain. Cryptocurrencies from Iran have already been laundered through numerous cross-border transactions, ultimately being converted into clean Canadian dollars and legally used by offshore investors (even Turkish citizens) to purchase luxury properties in Toronto. This completes a historic transformation from sanctioned, illegal, and high-risk assets to legitimate private property strictly protected by Western common law.

VII. The Crypto Strategy of the Central Bank of Iran and the IRGC

The most surreal discovery when examining this massive capital flight is that the Iranian state apparatus, which is cracking down on civilian capital flight and blocking cryptocurrency-fiat currency exchange channels, is itself the world's largest money launderer and operator of crypto assets.

A tracking report by Elliptic and TRM Labs reveals that cryptocurrency is the "core shadow financial layer" through which the Iranian government, central bank, and military circumvent US financial strangulation and maintain global military expansion. In the fourth quarter of 2025, on-chain activities directly or indirectly related to the Islamic Revolutionary Guard Corps (IRGC) accounted for approximately 50% of the absolute market share in Iran's vast crypto ecosystem, and this percentage continues to rise as international sanctions intensify.

Even more incredibly, the Central Bank of Iran (CBI) is using cryptocurrency to "stabilize the market." Leaked internal documents and on-chain data reveal that the CBI has stockpiled at least 507 million USDT on encrypted networks. This massive and clandestine digital asset is being used by the central bank as a "strategic foreign exchange buffer"—providing crucial dollar liquidity support in the local black market to stabilize the black market price of the rial and further control domestic prices.

Furthermore, the central bank and its affiliated government agencies have used USDT to build a closed international trade settlement network that is not subject to US jurisdiction. Through this covert design, Iran's sanctioned import payments and oil export revenues can be settled peer-to-peer without going through the SWIFT message network (Zedcex Exchange will be discussed later). This not only significantly reduces the risk of assets being frozen and seized by Western law enforcement agencies, but also provides covert funding for its global procurement of military supplies, including key sensors for the Shahed-136 drone and precision components for ballistic missiles.

8. The Disguise of Funds and Identity: The Deception is Always One Step Ahead

US regulators clearly could not stand idly by while Iran's funds were flowing out of the country. On July 2, 2025, Tether, in cooperation with the US government, executed an address-level freeze on Iranian-related funds, freezing 42 high-risk wallet addresses. More than half of the frozen wallets had high-frequency transaction links with Nobitex and IRGC (Islamic Revolutionary Guard Corps) affiliated addresses.

In response, Iranian crypto KOLs and OTC marketplaces quickly guided users to perform a secondary asset conversion: a large number of users urgently sold their TRC-20 USDT, migrating it via cross-chain bridges to Ethereum's Layer 2 network, Polygon, and exchanging it for DAI, a decentralized stablecoin pegged by smart contract algorithms and not dependent on a single centralized issuing entity. In this way, they attempted to build a more censorship-resistant and resilient method of value settlement.

Even if the funds are successfully converted into DAI or ETH, to ultimately exchange them for US dollars, Canadian dollars, or Turkish lira overseas, it still requires going through a top-tier, compliant global exchange with extremely high liquidity (such as Binance and Coinbase). However, under the pressure of global anti-money laundering standards, these exchanges have a zero-tolerance policy for blocking IP addresses and passports originating from Iran.

To circumvent this barrier, a "KYC black market" industry chain has emerged, specifically catering to Iranian capital flight. Companies like "Novin Verify" sell highly realistic forged documents on a large scale, including digitally retouched European passports, foreign driver's licenses, and matching fake utility bills. These forged documents have helped thousands of Iranians attempting to transfer funds successfully bypass the facial recognition and identity verification AI systems of global exchanges, enabling them to register accounts smoothly.

Next comes the funding. To give its massive, state-sponsored money laundering operations a legitimate, even deceptive, commercial veneer, the Iranian regime constructed an extremely complex matrix of transnational shell companies.

On January 30, 2026, the U.S. Treasury Department's OFAC took action, imposing comprehensive sanctions on two UK-registered cryptocurrency exchanges—Zedcex Exchange and Zedxion Exchange. (Zedcex is also a ticker symbol for crude oil 🤣 And now Iran hopes to control oil prices by controlling the Strait of Hormuz, which is ironic, isn't it?)

Since 2022, the cryptocurrency platforms Zedcex and Zedxion have processed nearly $100 billion in transactions, with over 56% of the transaction volume directly serving the IRGC's money laundering needs, weapons procurement, and the transfer of overseas funds by the elite. (Using cryptocurrency exchanges for money laundering—that's truly a massive operation.)

The company was secretly controlled by Babak Morteza Zanjani, an Iranian super-financial broker who had been imprisoned for embezzling billions of dollars in national oil funds and later released by the regime. Behind the scenes, with the assistance of his partner Solmaz Bani, he secretly manipulated these two platforms to launder billions of dollars for the IRGC (Islamic Revolutionary Guard Corps) to circumvent sanctions and fund regional terrorist networks and proxy forces in the Middle East. This scandal starkly exposed the significant loopholes in the UK's business registration system in preventing transnational financial crime (this is not ordinary company registration; cryptocurrency exchanges require licenses).

What's interesting is how the whistleblower discovered the irregularities? It turns out that the key staff members of the two exchanges, Elizabeth, Smith, and Muhammad, were actually just fictional digital avatars, simply a short, stock video of an ordinary model that they bought for a few dozen dollars from the stock photo website Shutterstock and played on a loop.

So, can compliant exchanges anticipate opportunities? Unfortunately, it's practically impossible.

Faced with a nationwide effort to deceive the public, even national institutions are unable to defend against it. How many commercial institutions can possibly defend against it?

Compliance technology is always lagging behind, and the exchanges with the best liquidity are always the first to suffer – Binance.

The Binance scandal involving Iranian funds, which broke in late February 2026, exposed the fragility and lag of global compliance systems. According to reports in the Wall Street Journal and the New York Times, "Binance's internal compliance investigators discovered that Iranian users successfully accessed more than 1,500 Binance accounts using VPNs and fake identities." (This statement is misleading, as the news reports equate 1,500 VPN-using accounts with 1,500 accounts controlled by Iran.)

Media reports indicate that between 2024 and 2025, up to $1.7 billion in crypto assets were secretly transferred to Iranian-linked entities through two main accounts on the Binance platform—including a Hong Kong-based payment company called Blessed Trust and another entity called Hexa Whale—with some even flowing directly to sanctioned terrorist organizations such as the Iranian Islamic Revolutionary Guard Corps (IRGC) and the Houthi rebels in Yemen.

From this argument, we can see that the flow of funds did not occur within the Binance platform. Instead, someone deliberately used Binance as a stepping stone or intermediary. The transactions related to Iran occurred after users deposited their funds onto the blockchain and then transferred them to multiple users. Binance was merely one link in this chain. Of course, what exactly happened still awaits the results of the third-party investigation.

Frankly, if Binance has run into trouble, can other compliant exchanges really remain completely untouched by "Iranian elements"? We're facing a nationwide effort to disguise and whitewash our actions. Who can remain unscathed?

IX. Shocking Billions of Dollars in State Assets Loss and Embezzlement by Government Officials

In March 2025, Iran's capital account balance hit a record high deficit of $9 billion. In just three months, $9 billion in hard assets left this heavily sanctioned country with extremely tight foreign exchange controls through various channels. How was this possible?

Hossein Samsami, a member of the Iranian parliament's economic committee, publicly admitted in parliament that from 2018 to mid-2025, a staggering $95 billion in non-oil export revenue, after being sold, never returned to Iran's financial system in any form. Iran's Minister of Economy has explicitly stated that the genuine private sector accounts for a paltry 15% of the country's total foreign trade.

The only possibility is that the vast majority of the missing hundreds of billions of dollars was intercepted by internal vested interests with close ties to the government, quasi-state institutions that control the lifeline of the national economy, and even high-ranking commanders of the Islamic Revolutionary Guard Corps (IRGC) through a complex network of shell companies set up overseas, and quietly converted into their private offshore assets.

A FinCEN report released in October 2025 indicated that in 2024 alone, as much as $9 billion in suspected Iranian shadow banking funds flowed through a complex global cover network to support the regime's military spending and the transfer of assets by corrupt officials. According to reports from TRM Labs and Chainalysis, known blockchain addresses associated with IRGC received over $2 billion in crypto funds in 2024, and this figure surged to $3 billion in 2025. Even in the fourth quarter of 2025, covert on-chain activity led by IRGC accounted for more than 50% of the total value received by the entire Iranian crypto ecosystem.

In a media interview, U.S. Treasury Secretary Scott Bessent stated that we are witnessing an unprecedented capital flight from the Iranian leadership, with top officials and corrupt elites frantically transferring tens of millions of dollars abroad using the most efficient financial infrastructure and blockchain networks at their disposal, much like "rats fleeing a sinking ship."