Quick Answer
Yes, crypto is legal in Iran but heavily restricted.
- Crypto mining is legal, but using it for payments is banned.
- The Central Bank has full authority and requires licenses for all participants.
Legal Status of Crypto in Iran
Cryptocurrency in Iran operates in a complex legal gray area, being neither fully legal nor completely banned. The government has legalized crypto mining as an economic sector but simultaneously prohibits using digital currencies as a payment system. The Central Bank of Iran (CBI) is the sole regulatory authority, requiring licenses for all market participants and enforcing strict AML compliance to maintain tight control over the market and mitigate risks like money laundering.
Current Regulations
The Central Bank of Iran (CBI) has been granted full authority to manage the crypto market, introducing a wave of strict regulations. As of early 2025, the CBI has ordered the closure of rial payment gateways for exchanges, requiring them to obtain licenses and provide transparent access to transaction data. While crypto mining is legal, licensed miners must sell their holdings to the central bank to fund imports, and using digital currency for domestic payments remains strictly prohibited.
Regulatory Authorities
Several government bodies are involved in regulating and enforcing Iran's complex cryptocurrency framework.
- Central Bank of Iran (CBI): As the sole regulatory authority, the CBI has full power to manage and monitor the entire cryptocurrency market. It is responsible for licensing all participants, setting the rules for digital asset exchange, and requiring miners to sell their crypto to the state to fund imports.
- Financial Intelligence Unit (FIU): This unit is central to Iran's anti-money laundering (AML) efforts, responsible for collecting and analyzing financial intelligence to prevent illicit activities. While its mandate is broad, it oversees the reporting of suspicious transactions, which includes those involving digital assets.
- Supreme Council of Cyberspace: As Iran’s top internet governance body, this council released a regulatory roadmap outlining a policy of active control over global cryptocurrencies. Its framework aims to facilitate international trade using crypto, likely as a method to circumvent sanctions.
- Ministry of Energy: This ministry regulates the energy-intensive crypto mining sector by imposing consumption ceilings on licensed miners. Its primary role is to manage the significant strain that mining activities place on the national power grid.
- Ministry of Culture and Islamic Guidance: This ministry controls the public promotion of cryptocurrencies, having forbidden all local media from running advertisements for them. The stated goal of this ban is to safeguard the public from the high risks associated with digital assets.
Historical Context
Iran's crypto journey began with a complete ban in 2018 over money laundering fears. A year later, facing crippling sanctions, the government reversed course, legalizing crypto mining in 2019 to bypass the US dollar, though using it for payments remained illegal. This culminated in early 2025 when, amid a currency crisis, the Central Bank of Iran (CBI) was granted full authority over the market. The CBI immediately shut down rial payment gateways for exchanges, aiming to stabilize the economy but pushing many users toward unofficial markets and solidifying state control.
Compliance Requirements for Businesses in Iran
Businesses operating in Iran, including those in the crypto space, must navigate a strict compliance landscape governed by the Anti-Money Laundering Act of 2008. The framework mandates several essential procedures to prevent illicit financial activities. Key requirements include:
- AML & KYC Checks: Organizations must perform robust Anti-Money Laundering (AML) checks, which include conducting Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures. This involves verifying customer identities before establishing a business relationship and using risk-based assessments to determine the necessary level of scrutiny. Enhanced due diligence is required for high-risk clients, such as Politically Exposed Persons (PEPs).
- Reporting Obligations: It is mandatory to report any suspicious transactions or activities to Iran's Financial Intelligence Unit (FIU). This includes filing Suspicious Activity Reports (SARs) and reporting any customer transaction that exceeds 150 million Iranian Rials.
- Record-Keeping: All entities are required to maintain detailed records of customer transactions and identification data. These records must be accessible to regulatory and supervisory units to ensure compliance and aid in potential investigations.
- Internal Compliance Structure: Companies must appoint a dedicated AML Compliance Officer responsible for overseeing adherence to all internal policies, monitoring transactions, and ensuring timely reporting to the authorities.
- Sanctions Screening: A critical component of compliance is screening customers against international sanctions lists, particularly those issued by the United Nations, as outlined in Iran's AML/CFT guidelines.
Why this matters for Cross-Border Payments
For businesses in India engaging in cross-border trade with Iran, these stringent crypto regulations create significant operational friction. While Iran leverages state-controlled crypto to fund imports and bypass sanctions, Indian companies face a convoluted payment system where transactions are funneled through the Central Bank of Iran rather than direct channels. This introduces major pain points, including payment delays, heightened compliance burdens, and the inherent risk of navigating a system designed to circumvent international financial norms, ultimately complicating trade and undermining the potential efficiencies of digital assets.
How Lightspark Enables Compliant Crypto-Native Payments
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For regulated institutions, Lightspark provides tools that facilitate adherence to strict compliance frameworks. Features like audit-ready reporting, flexible custody, and built-in OFAC screening help businesses meet their record-keeping and sanctions screening obligations. This infrastructure allows companies to leverage crypto-native payments while maintaining the necessary controls for AML compliance, without Lightspark managing their regulatory duties directly.
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Notice: This article is provided for informational purposes only and does not constitute legal advice.
Sources
- “AML Compliance Guidelines: Iran.” AML Watcher, AML Watcher, 2025, amlwatcher.com/our-coverage/iran/.
- Boltuc, Silvia. “Crypto Under Control: The Geopolitical Drivers of Iran’s New Regulation.” SpecialEurasia, 5 Feb. 2025, www.specialeurasia.com/2025/02/05/crypto-iran-geopolitics/.
- “Iran - Cryptocurrency Laws and Regulation.” Freeman Law, Freeman Law, 2022, freemanlaw.com/cryptocurrency/iran/.
- “Iran Sanctions: Cryptocurrency.” OFAC Lawyer, OFAC Law Group, 2025, ofaclawyer.net/economic-sanctions-programs/iran/cryptocurrency/.
- Lob, Eric. “Iran and Cryptocurrency: Opportunities and Obstacles for the Regime.” Middle East Institute, 27 Dec. 2022, www.mei.edu/publications/iran-and-cryptocurrency-opportunities-and-obstacles-regime.
- Motamedi, Maziar. “Iran’s Government Hits Out at Crypto Again as Currency Freefalls.” Al Jazeera, 27 Feb. 2025, www.aljazeera.com/news/2025/2/27/irans-government-hits-out-at-crypto-again-as-currency-freefalls.
- Team Sanction Scanner. “Anti-Money Laundering (AML) in Iran.” Sanction Scanner, 22 Sept. 2023, www.sanctionscanner.com/aml-guide/anti-money-laundering-aml-in-iran-478.
