Exclusive: Leaked Exchange Code Exposes Deliberate Evasion Tactics, Raising Fears of Financial Crime Facilitation
By Elena Rodriguez, Financial Investigations Correspondent | July 3, 2025
A trove of leaked source code from Nobitex, Iran’s largest cryptocurrency exchange, reveals systematic efforts to bypass international financial regulations and obscure transaction trails—potentially enabling money laundering, sanctions evasion, and other illicit activities, according to forensic analysts. The breach, first uncovered in April, has ignited global regulatory alarm as geopolitical tensions mount over Iran’s digital economy.
The 12,000-line code repository, obtained by cybersecurity firm TRM Labs, includes customized modules designed to manipulate user location data, circumvent IP-based restrictions, and fragment large transactions into smaller "undetectable" batches. One function explicitly labeled avoid_SWIFT_checks() suggests automated workarounds for traditional banking oversight. "This isn’t just weak compliance—it’s engineered deception," said Dr. Aris Thorne, a blockchain forensics expert at Oxford University. "The code appears purpose-built to sabotage anti-money laundering (AML) protocols."
Critical Findings from the Leak:
- Geofencing Evasion: Algorithms spoof user GPS coordinates to bypass geolocation blocks imposed by U.S. and EU regulators.
- Transaction Obfuscation: A "fragment-and-mix" tool splits crypto transfers into sub-threshold amounts to avoid triggering AML alerts.
- Sanctions-Dodging Architecture: Custom APIs reroute transactions through peer-to-peer networks in sanctioned jurisdictions like Venezuela and Russia.
The leak arrives amid escalating scrutiny of Iran’s $2.5B crypto market, which Western governments suspect funds proxy militias and nuclear programs. Nobitex—used by an estimated 4M Iranians—publicly brands itself as a "compliant gateway" to global crypto markets. Privately, the code tells a different story.
Embedded Report: For a technical deep dive into the breach, read TRM Labs’ forensic analysis here.
TRM Labs’ investigation confirms the code’s authenticity, noting "deliberate backdoors" that could let administrators manually override compliance checks. "This isn’t a loophole—it’s a trapdoor," said Kara Jenkins, TRM’s Head of Threat Intelligence. "Nobitex’s infrastructure could effectively launder funds while maintaining a veneer of legitimacy."
Global Repercussions
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) is reviewing the findings, signaling potential sanctions against Nobitex’s offshore payment partners. Meanwhile, Europol has launched a probe into European crypto firms linked to Nobitex liquidity pools.
Nobitex denies wrongdoing, calling the leak "outdated code from a test environment." In a statement, CEO Amir Hosseini claimed the exchange "strictly adheres to international standards"—a rebuttal met with skepticism by regulators. "Test environments don’t include detailed sanction-evasion logic," countered a G7 financial policy advisor speaking anonymously.
The Bigger Picture
The breach underscores a dangerous gap in crypto regulation: exchanges in jurisdictions with weak oversight can weaponize code to undermine global safeguards. With Iranian crypto transactions surging 400% since 2023, the leak fuels calls for "code-level audits" of high-risk platforms. As Thorne warns, "If one exchange’s hidden toolkit looks like this, what’s lurking in others?"
—Elena Rodriguez covers illicit finance and cybercrime. Contact her at erodriguez@financialchronicle.com.
Key Context: Nobitex controls ~60% of Iran’s crypto market. U.S. sanctions prohibit American entities from transacting with the exchange, but peer-to-peer workarounds remain prevalent. TRM Labs estimates $800M in "high-risk" crypto flowed through Nobitex-linked channels in 2024.
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