This Week in Global Compliance — Crypto-Asset Sanctions Evasion and AML Oversight Intensifies
This Week in Global Compliance — Crypto-Asset Sanctions Evasion and AML Oversight Intensifies
January 9, 2026 — Week of 4–9 January
Executive Summary
The first reporting window of 2026 closed with crypto-asset compliance and sanctions evasion emerging as principal risk vectors for global compliance functions. Nation-state actors have leveraged digital assets to circumvent established financial controls, prompting intensified scrutiny on virtual asset service providers (VASPs) and national AML frameworks integrating crypto under reporting regimes.
A TRM Labs analysis underscored how Iran’s Islamic Revolutionary Guard Corps (IRGC) moved approximately $1 billion via UK-registered crypto exchanges, testing persistent on-chain infrastructure for sanctions evasion. This illustrates how digital asset flows are increasingly exploited by sanctioned entities outside traditional correspondent channels.
In India, the Financial Intelligence Unit (FIU) registered 49 cryptocurrency exchanges as reporting entities under the country’s AML regime for FY2024–25, reflecting a strategic regulatory emphasis on integrating digital asset platforms into formal compliance ecosystems.
These developments reinforce the operational imperative for compliance teams to tighten transaction monitoring, sanctions screening across on-chain and off-chain networks, and VASP governance.
Top Signals
1. IRGC uses UK-registered crypto exchanges to channel sanctioned funds
An analysis found that Iran’s Islamic Revolutionary Guard Corps used two U.K.-registered exchanges to move roughly $1 billion in digital assets, with transactions primarily in Tether (USDT) on Tron networks.
Why it matters:
State-linked sanctions evasion via VASPs signals that compliance programs must extend sanctions screening and monitoring mechanisms beyond traditional banking rails into cross-jurisdictional crypto infrastructure.
2. India’s FIU registers 49 crypto exchanges under AML reporting framework
India’s Financial Intelligence Unit confirmed that 49 virtual digital asset exchanges completed AML registration for FY2024–25, encompassing 45 domestic and 4 offshore platforms.
Why it matters:
Bringing VASPs into the AML reporting fold strengthens Suspicious Transaction Report (STR) pipelines and creates a compliance baseline for digital assets; institutions engaging with these exchanges should recalibrate risk assessments and monitor integration with global AML/CFT norms.
Deep Dives
1. Enforcement — Sanctions compliance in on-chain environments
The IRGC case illustrates how sanctioned actors repurpose ostensibly regulated crypto exchanges to route significant volumes, often exploiting jurisdictional blind spots in sanctions enforcement.
Practical impact:
- Expand sanctions lists to include on-chain wallet identifiers and associated entities
- Integrate blockchain analytics into screening and case investigation workflows
- Model historical sanctioned counterparty behavior to pre-empt evasive patterns
2. Regulation — Crypto reporting obligations take shape in India
India’s FIU action marks a formal adoption of AML oversight over VASPs, requiring reporting and compliance with the Prevention of Money Laundering Act (PMLA).
Practical impact:
- Assess VASP counterparty risk and integrate STR/CTR reporting obligations for crypto exposures
- Update AML policies to reflect digital asset transaction lifecycle visibility requirements
- Verify beneficial ownership and wallet control as part of enhanced due diligence
Data Points
- ~$1 billion in crypto moved by IRGC-linked activity through two UK-registered exchanges.
- 49 crypto exchanges registered under India’s FIU AML framework for FY2024–25.
Watchlist
- Expansion of crypto-asset AML reporting regimes in other jurisdictions (APAC/EMEA).
- Supervisory guidance on sanctions controls for on-chain and cross-chain transactions.
- Enforcement actions targeting VASPs facilitating cross-border sanctions evasion.
- Trends in stablecoin usage and its implications for illicit finance monitoring.
Sources
This briefing consolidates publicly available information from global regulators, financial intelligence units, law enforcement agencies, sanctions authorities, and recognised news outlets covering the week of 4–9 January 2026.