$4B Iran crypto trail puts CoinEx under the spotlight: Report

Security research firm TRM Labs has flagged Seychelles-based global crypto exchange CoinEx as a key enabler for Iran-linked illicit capital flows. 

According to TRM Labs, over $3.8 billion was traded between CoinEX and the four Iranian crypto exchanges, including Nobitex, which were sanctioned by the U.S. earlier this month. Out of the nearly $4 billion flagged flows, over half of the funds were routed from Nobitex, at an average of $1M per day since 2018. 

The report alleges that top local Iranian exchanges moved 5-10% of their volumes via CoinEx, noting that it was a ‘coordinated arrangement’ rather than organic adoption. 

For Ari Redbord, global head of policy at TRM Labs, the Iranian regime’s international crypto infrastructure was intact as CoinEx was not part of the sanctioned entities in early June. 

In an email statement, Redbord told AMBCrypto, 

CoinEx isn’t just another exchange with incidental Iran exposure — it has functioned as the backbone of Iran’s cryptocurrency ecosystem for seven years, processing nearly USD 4 billion across more than 60 Iranian platforms.

He added, 

This indicates a willingness to engage with Iranian actors such as the IRGC and enable the largest state sponsor of terrorism in the world to evade sanctions and destabilize the region.

According to Redbord, the four sanctioned crypto exchanges, including Nobitex, account for 78% of Iran’s domestic cryptocurrency volume. He claimed that CoinEx has direct on-chain exposure to the Iran Revolutionary Guard Corps (IRGC) and its proxies in Palestine and  Lebanon. 

In fact, the firm established that CoinEx received $67M from the Central Bank of Iran, further underscoring how embedded it is with the Iranian government. 

Iran’s alleged Bitcoin mining operations

Additionally, the report noted that the state could have received mining payouts. The security firm cited Nobitex-linked addresses that received payouts from ViaBTC, a Hong Kong-based mining infrastructure firm. 

Notably, TRM Labs uncovered over $154 million in mining rewards, adding that, 

Given that industrial-scale cryptocurrency mining in Iran is subject to strict government oversight, these activities could also indicate access to state-authorized mining infrastructure or partnerships.

Interestingly, the report didn’t flag Binance, which was recently speculated to be another conduit for Iran-sanctioned entities to move funds.

During the West Asia crisis, the U.S. turned Iran’s crypto into a chokepoint, freezing over $1 billion of its funds. The sanctioning of the four exchanges was part of the broader U.S pressure to bring  Iran to accept its deal. It marked a classic case of crypto on the geopolitical chessboard. 

As of writing, negotiations are still ongoing between the two countries. But it’s unclear whether a permanent peace deal will be achieved soon. 

Final Summary

• CoinEx handled nearly $4 billion for Iran-sanctioned entities, making it a key global strategy for the regime, according to TRM Labs. 
• Recent U.S. sanctions only targeted 78% of Iranian crypto volumes