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The sons of a powerful family with close ties to Iran’s new supreme leader control the country’s largest cryptocurrency exchange, transforming it from a startup into a conduit to the global economy used by both blacklisted state institutions and ordinary citizens.

Since Nobitex was founded by the two brothers under an alternative family name, it has processed between tens and hundreds of millions of dollars in transactions linked to sanctioned groups including Iran’s central bank and the Islamic Revolutionary Guard Corps, a Reuters investigation has found.

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The two are members of the Kharrazi family, one of the most influential dynasties in the Islamic Republic. Corporate records show that when the exchange started, the brothers were listed under a surname rarely used by members of the family.

The company rapidly became embedded in Iran’s economy. Nobitex claims 11 million users, more than 10 percent of Iran’s population. Locked out of international banking and facing a devalued rial and rampant inflation, ordinary Iranians use the exchange to buy and hold cryptocurrency.

While Iran is subject to blanket Western economic sanctions, the exchange has avoided being designated by the United States and its allies. Reuters could find no indications that anyone in the Kharrazi family has been sanctioned by Western governments, and was unable to determine why Nobitex has been spared the kind of penalties placed on other major Iranian economic players.

The revelation of the elite origins of the Nobitex founders by Reuters comes at a critical moment for Iran and especially the IRGC. The IRGC has further cemented its control of Iran’s economy and security apparatus since the killing of Supreme Leader Ali Khamenei in a February airstrike at the outset of the US and Israeli war in Iran.

The brothers are the third Kharrazi generation at the heart of Iran’s ruling establishment. Kharrazis have advised supreme leaders and occupied key political, diplomatic and religious posts. The clan is related by marriage to all three supreme leaders of the Islamic Republic: the revolutionary founder Ruhollah Khomeini, the late Khamenei, and Khamenei’s son, Mojtaba.

Brothers Ali and Mohammad Kharrazi – using the family surname Aghamir – built Nobitex into the country’s dominant cryptocurrency provider. It handles an estimated 70 percent of Iran’s crypto transactions. It’s not unheard of for some Iranians to have and use alternative family names. But the brothers appear to be the only ones in their immediate family to routinely distance themselves from their famous bloodline.

Nobitex serves as a bridge to global crypto markets and a central node in a parallel financial system used to move funds beyond the reach of Western sanctions, Reuters found. It’s used by the Iranian state to route money to allies outside the conventional banking system, according to an analysis of blockchain records by crypto analytic firm Crystal Intelligence and interviews with four private financial investigators. Reuters also spoke with nine Iranians who have worked for or with Nobitex, including six who said they were aware of state funds subject to Western sanctions passing through the exchange.

‘A flashing red light’

In statements emailed to Reuters, Nobitex denied having direct government connections or assisting the state, and said that any illicit funds moving through the exchange did so without management approval or awareness. The company said the brothers had not changed their identity or used an alternative identity.

The company also said any transactions involving state entities were far below the estimates investigators shared with Reuters.

“Nobitex is a private and independent business. It has never been an arm of the government and has never had any relationship, arrangement, agreement, or contract with the Central Bank of Iran, the IRGC, or any other governmental body,” Nobitex said.

Iran’s government did not respond to requests for comment via the country’s delegations to the United Nations in New York and Geneva.

“Under President Trump’s strong leadership, the United States is moving aggressively with Economic Fury, utilizing all available tools to maintain maximum pressure on Iran and systematically degrade Tehran’s ability to generate, move, and repatriate funds,” a Trump administration official wrote in response to detailed questions about the findings by Reuters. The official made no reference to Nobitex.

Throughout the war, Nobitex has continued processing transactions, even during a government-imposed nationwide internet shutdown and widespread power outages in Tehran, according to three blockchain analysis firms, which track activity involving Nobitex and other exchanges.

During that time Nobitex has processed more than $100 million in transactions, about 20 percent of its usual activity, according to Crystal Intelligence, which has been investigating Iranian cryptocurrency flows for more than four years.

“The concern with Nobitex is that since it has so much activity that belongs to normal Iranians, it is hard to separate the regime from the people using the platform,” said Nick Smart, chief intelligence officer at Crystal Intelligence.

US Democratic Senator Elizabeth Warren said the revelations about Nobitex were cause for alarm.

“This latest reporting is a flashing red light: Adversaries are using digital assets as an alternative to the US-led global financial system – moving billions easily because too many services across the crypto ecosystem lack basic controls to prevent money laundering and sanctions evasion,” Warren, the ranking Democrat on the Senate Banking Committee, said in a statement to Reuters.

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