UK Exchange Falls: Iran Revolutionary Guard's $1 Billion Sanctions Evasion Case Revealed

A Hidden Bill Unveiled

According to the latest analysis by TRM Labs, a long-operating sanctions evasion network has surfaced. Two UK-registered crypto exchanges, Zedcex and Zedxion, transferred approximately $1 billion to the Iranian Islamic Revolutionary Guard Corps (IRGC), with the vast majority of transactions conducted in USDT on the TRON blockchain. This is not an isolated incident but a systemic issue within financial infrastructure.

The “Perfect Channel” for Sanctions Evasion

Exchanges as Tools

Based on analytical data, from 2023 to 2025, transactions related to IRGC account for 56% of the total trading volume on these two exchanges. More critically, the 2024 data shows that 87% of Zedcex’s trading volume is directly linked to IRGC. This is no coincidence but a carefully designed financial infrastructure.

The operational model of these two exchanges is straightforward: receive funds, convert to stablecoins, transfer via TRON, and evade international sanctions. Related information indicates that the platform also transferred over $10 million in USDT to a sanctioned Houthi armed terrorist financier, further confirming its role as an embedded evasion tool.

Why choose TRON and USDT?

This combination is not accidental. TRON’s low fees and high speed make it the preferred choice for large transfers, USDT offers stability, and UK registration provides a legal gray area.

The Practical Challenges of Regulation and Tracking

Compliance Gaps in Exchanges

As a global financial hub, the UK’s oversight of crypto exchanges surprisingly has such loopholes. The cases of Zedcex and Zedxion demonstrate that merely being registered in the UK does not guarantee compliance. These exchanges clearly did not conduct sufficient due diligence (KYC/AML) or effectively match against international sanctions lists.

The Importance of On-Chain Tracking

The good news is that TRM Labs’ analysis proves on-chain tracking is feasible. This blockchain compliance firm can identify this sanctions evasion network through transaction patterns, fund flows, and other clues. According to related information, TRM Labs, in collaboration with TRON DAO and Tether, has established the T3 FCU system, which can monitor over $3 billion in transactions and work with more than 30 law enforcement agencies worldwide.

What does this mean? It indicates that the difficulty of evading sanctions is increasing. Although Zedcex and Zedxion have been operating for years, they have ultimately been uncovered.

Broader Ecosystem Issues

Risks to the TRON Ecosystem

This case not only poses reputational risks to the TRON ecosystem but also raises concerns about regulatory pressure from countries like the US when a public blockchain is extensively used for sanctions evasion. While TRON itself is neutral technology, its misuse cannot be ignored.

The Double-Edged Sword of Stablecoins

USDT’s widespread use forms the backbone of the crypto market but also makes it a channel for capital flows. This case shows that technical tracking alone is insufficient; it requires multi-layered cooperation among issuers (Tether), exchanges, and on-chain monitoring entities.

Possible Future Changes

UK regulators may strengthen oversight of crypto exchanges, especially regarding transactions involving sanctioned entities. The US might pressure stablecoin issuers involved in such activities. The TRON ecosystem could also face stricter on-chain monitoring requirements.

From another perspective, this case demonstrates the necessity of compliance. The T3 FCU model—collaboration among exchanges, stablecoin issuers, and monitoring companies—may become an industry standard.

Key Takeaways

This is not just an Iran issue but a global challenge for crypto compliance. The $1 billion sanctions evasion scale exposes real gaps in exchange regulation. While on-chain tracking is feasible, it requires participation from the entire ecosystem—from exchange KYC/AML procedures to stablecoin issuer cooperation and professional monitoring analysis.

The fall of UK exchanges reminds us that legal registration does not equal compliance commitment. Future crypto markets will see increasing compliance standards, and exchanges that prioritize AML/CFT will gain competitive advantages. For infrastructure like TRON and USDT, balancing openness and security will be crucial for long-term development.