How UK Bitcoin Exchanges Became Channels for Sanctioned Financial Networks

Since 2023, United Kingdom-based cryptocurrency platforms have emerged as unexpected conduits for complex international financial flows. Investigation into two major UK bitcoin exchanges reveals how regulatory gaps and cryptocurrency’s borderless nature have created vulnerabilities in global sanctions enforcement. The Islamic Revolutionary Guard Corps (IRGC) moved approximately $1 billion through these platforms over a three-year period, exploiting stablecoin infrastructure and coordinated exchange networks to fund operations across multiple jurisdictions.

The scale of activity tracked investigators’ attention immediately. IRGC-linked transactions surged from $24 million in 2023 to a peak of $619 million in 2024, before settling at $410 million in 2025. These transfers accounted for 56% of total transaction volume across the platforms, signaling systematic rather than sporadic use. The sophistication of the operation—spanning multiple entities, shared infrastructure, and international payment routing—demonstrates how state actors exploit cryptocurrency’s technical properties to circumvent traditional financial monitoring.

Zedcex: The Primary Infrastructure for Cross-Border Transfers

One of the two UK bitcoin exchanges, Zedcex, functioned as the backbone for IRGC fund movements. The platform processed millions in Tether stablecoin transactions on the Tron network, routing payments directly to Iranian partners and regional intermediaries without requiring additional conversion steps. This direct channel eliminated friction in the sanctions-evasion process.

Corporate records link Zedcex to Babak Zanjani, a businessman with extensive experience navigating financial restrictions. Zanjani was previously sanctioned for facilitating Iran’s oil trade during embargo periods, positioning him as a highly experienced financial operative comfortable operating in restricted environments. His involvement in this bitcoin exchange suggests deliberate continuity in Iran’s financial strategy.

At its operational peak in 2024, IRGC flows dominated the platform’s activity, comprising 87% of all transactions. Beyond direct stablecoin transfers, Zedcex integrated with Turkish payment processors and other regional financial services, creating a shadow network capable of converting cryptocurrency into fiat currency across multiple jurisdictions. This infrastructure allowed the IRGC to fund both domestic operations inside Iran and regional activities through seamless, low-volatility channels.

Zedxion’s Parallel Operations and Financial Reach

The second UK bitcoin exchange, Zedxion, operated with remarkable similarity to Zedcex. The platforms shared directors, registered addresses, and core technical infrastructure—suggesting centralized management despite separate corporate identities. IRGC-linked activity accounted for nearly 50% of Zedxion’s transaction volume by 2025, indicating it served a complementary role within the broader financial architecture.

Zedxion facilitated transfers to individuals and entities sanctioned by multiple authorities, including those designated as associated with regional militant groups. The platform’s connection to domestic Iranian exchanges like Nobitex created an integrated ecosystem, allowing funds flowing through UK bitcoin exchanges to enter Iran’s financial system with minimal friction. Stablecoins proved particularly valuable for this process—their price stability eliminated the volatility concerns of traditional cryptocurrencies while enabling rapid, high-volume transfers.

The mirrored structure of both exchanges raises critical questions about how UK financial regulators approved and monitored these entities. Regulatory filings showed both claimed dormant status despite substantial on-chain activity visible to blockchain analysts, suggesting either inadequate oversight or intentional misrepresentation during compliance submissions.

The Broader Challenge for Global Bitcoin Exchange Oversight

These cases highlight a persistent gap in cryptocurrency regulation: the difficulty of coordinating cross-border enforcement when digital assets operate on decentralized networks. While UK authorities maintained oversight frameworks, the technical architecture of blockchain transactions and the borderless nature of stablecoin flows created challenges in real-time monitoring.

Sanctioned entities increasingly recognize that bitcoin exchanges registered in major financial centers can serve as convenient gateways into legitimate cryptocurrency infrastructure. The IRGC’s systematic use of UK-based platforms demonstrates how state actors adapt operational security to exploit regulatory arbitrage—identifying jurisdictions where cryptocurrency monitoring remains underdeveloped despite being technically advanced.

The efficiency of these transfers across multiple platforms underscores an uncomfortable reality: cryptocurrency’s defining feature—borderless, rapid settlement—directly conflicts with the territorial basis of financial sanctions. As long as bitcoin exchanges operate with varying compliance standards, nation-states and non-state actors will continue identifying and exploiting these gaps.

Addressing this challenge requires unprecedented international coordination among financial regulators, cryptocurrency exchanges, and blockchain monitoring firms. The case of UK bitcoin exchanges moving sanctioned capital demonstrates that regulatory frameworks designed for traditional finance may prove inadequate in an environment where transactions settle in seconds across multiple continents.