They freed a man from death row to run this machine.
His name is Babak Morteza Zanjani. He embezzled billions from Iran’s national oil company. Convicted. Sentenced to death. Sentence commuted. And in 2025, the Islamic Republic freed him from prison for one purpose: to build the cryptocurrency infrastructure through which the IRGC now launders the revenue from its Strait of Hormuz toll system. The man who stole from the regime was released to steal for it.
Here is how the machine works. Every step is sourced. Every entity is named. Every dollar is traced.
A supertanker approaches Hormuz. Its operator emails the IRGC intermediary with cargo manifests, flag, crew lists, and destination. Iran’s five-tier nationality system assigns a price. Two million barrels at one dollar per barrel. Two million dollars. The captain has seconds to pay in Bitcoin. Payment confirms on-chain. A VHF passcode is issued. An IRGC naval escort guides the vessel through the mined corridor.
The Bitcoin enters an IRGC-controlled wallet. Within minutes it hops to a second-layer address with no attribution. From there it splits into two rails.
Rail one runs through Zedcex, a UK-registered exchange that processed $94 billion since August 2022. At peak, 87 percent of volume was IRGC activity on Tron. Its sister entity Zedxion listed Zanjani as director. OFAC sanctioned both on January 30 with seven Tron wallets. Israel’s NBCTF had flagged five of those same wallets four months earlier. Israel found the wallets before the US froze them. The UK is now dissolving both entities after discovering the listed director was a fabricated identity using a stock photo. A $94 billion pipeline registered in London under a name that does not exist.
Rail two bypasses exchanges entirely. OTC brokers in Dubai, Istanbul, and Hong Kong accept Bitcoin through encrypted channels. Chainalysis documented that Chinese-language laundering networks processed $16.1 billion in 2025 at $44 million per day. The IRGC feeds directly into this ecosystem, connecting to Huione, the Cambodian platform that processed $39.6 billion before FinCEN designated it as a primary laundering concern.
Once Bitcoin becomes USDT on Tron, it enters CIPS through Kunlun Bank, China’s sanctions-exempt correspondent for Iranian trade. USDT converts to yuan. Yuan purchases food, medicine, and dual-use goods from Chinese suppliers shipping through front companies in Turkey, the UAE, and Hong Kong to Iranian ports. The Central Bank of Iran itself purchased over $500 million in USDT through brokers in this network, per documents Zanjani leaked and Elliptic analyzed. The central bank is not tolerating the machine. The central bank is feeding it.
The IRGC’s on-chain activity exceeded $3 billion in 2025, over half of Iran’s $7.8 billion crypto ecosystem. The same rails fund Hezbollah, the Houthis, and Hamas. OFAC designated Houthi financier Sa’id al-Jamal for laundering IRGC revenue and facilitating Russian weapons procurement through crypto. The machine that monetizes the strait arms the proxies.
Seven jurisdictions. Three blockchains. Two fiat currencies. Zero intervention points after the initial Bitcoin payment clears. The architecture was legislated in Iran’s parliament, codified in the “Strait of Hormuz Management Plan” on March 30, stress-tested across $94 billion, and staffed by a man the regime pulled from death row because he was the only person who knew how to build it.
Trump’s warships catch the ships. Bessent’s GENIUS Act catches the stablecoins. Nobody catches the gap between them. And the man who runs it was already supposed to be dead.
open.substack.com/pub/shanak…