How to cite this article / Come citare questo articolo
Akbari, A.A.; Bahari Ghazani, M. (2026). A Criminological Examination of Cryptocurrency-Related Crimes with a Focus on Iran’s Legislative Criminal Policy. Aequitas Magazine, 11, 38-54.
DOI: https://doi.org/10.5281/zenodo.24002467
ABSTRACT Rapid technological developments have continually generated new instruments and mechanisms for the advancement of knowledge and the facilitation of human life. The possibility of criminal misuse of such developments, however, should not justify abandoning their legitimate and beneficial functions. Virtual forms of money, particularly digital and cryptographically secured currencies, are among the emerging phenomena that, alongside their legitimate economic applications, have increasingly been associated with the commission of certain offences. Although cryptocurrency-related offending takes diverse forms, money laundering and fraud warrant particular attention because of their links to other criminal activities and the frequently organized nature of their commission. Employing a descriptive-analytical method and drawing on documentary and library-based sources, this study examines preventive measures against money laundering and fraud in the field of digital currencies. The findings indicate that factors such as the difficulty of identifying the true identity of transaction parties, uncertainty regarding the origin and destination of transferred funds, and insufficient technical expertise among law-enforcement and prosecutorial authorities contribute materially to the expansion of these offences. Although the detection and prosecution of cybercrime, especially cryptocurrency-based money laundering, face significant obstacles, these difficulties can be mitigated through the capacities of specialized public institutions, the involvement of qualified private persons and entities, the enhancement of the technical knowledge and practical expertise of the police and other responsible bodies, and the expansion of international cooperation. Against this background, the adoption of proportionate criminal provisions and a comprehensive, coordinated criminal policy that takes account of the complex characteristics of cyberspace and emerging financial technologies is indispensable.
SUMMARY: 1. Introduction – 2. Definitions and Concepts – 3. Legislative Background of Digital Currencies in Iran – 4. Criminal Use of Digital Currencies – 5. Unauthorized Use of Electricity Connections – 6. Threats to Public Health or the Environment – 7. Non-Criminal Preventive Measures – 8. Conclusion.
1. Introduction
Contemporary technological advances have continuously facilitated the emergence of new tools and phenomena capable of contributing to the development of knowledge and improving the quality of human life. The possibility that such developments may be misused cannot, in itself, provide a legitimate basis for disregarding their positive functions and benefits. Virtual money, of which cryptocurrencies and digital currencies constitute major examples, represents a class of financial innovations arising from technological change. Cryptocurrencies employ sophisticated cryptographic methods to enhance the security of exchanges and protect financial data and transmitted information. The complex technical and computational architecture underlying the technology provides a relative degree of transactional security and makes the alteration or manipulation of recorded information considerably more difficult. Cryptocurrencies may also be converted into conventional currencies and, in certain active markets and exchanges, can be traded for currencies such as the US dollar, euro, and pound sterling. Bitcoin and altcoins such as Ethereum and Cardano are among the most prominent examples of these digital assets, whose use has expanded substantially in recent years.
The fundamental distinction between conventional currencies and digital currencies lies in the mechanisms through which they are issued and controlled. Conventional money is generally issued under the supervision of states and monetary authorities, whereas many cryptocurrencies are created and exchanged through decentralized structures and computer networks, without their administration necessarily being vested in a particular state, person, or corporation. This characteristic, while generating economic and technological advantages, may also create opportunities for unlawful exploitation. As reports of Bitcoin-mining farms, unauthorized imports of mining equipment, and seizures of mining devices have increased, public attention has increasingly turned to the prospective profitability of cryptocurrency mining. Expectations of rapid and substantial returns have encouraged some individuals to invest in the sector, giving rise to ancillary activities such as the sale, supply, installation, and maintenance of mining equipment, as well as the manufacture of devices intended to reduce mining noise. Cryptocurrencies may be used in offences including theft, fraud, gambling, the purchase and sale of prohibited goods and items, and other unlawful conduct. Organized crime assumes particular significance because of the breadth of its harmful consequences and is even regarded as a threat to the development of states. Money laundering is among the most important forms of organized crime in this field. Even in conventional settings, money laundering is difficult to detect and prosecute because it is dependent upon a predicate offence and because offenders seek to conceal the illicit origin of proceeds. Where the laundering of criminal proceeds is conducted through cryptocurrencies, cross-border transfers, transaction speed, and the difficulty of identifying persons involved may further complicate criminal investigation and prosecution. Accordingly, this article examines cryptocurrency-related offences from a criminological perspective and analyses preventive measures in light of Iran’s legislative criminal policy.
The study addresses the following question: to what extent can the existing Iranian legal framework prevent and respond to money laundering, fraud, and unlawful mining involving cryptocurrencies? Its method is descriptive-analytical and documentary: the discussion examines selected statutory provisions, regulatory instruments, and scholarly and institutional materials, then considers their application to the conduct described. The analysis is doctrinal rather than empirical; it does not claim to measure the prevalence of cryptocurrency crime or the effectiveness of particular enforcement operations. Its contribution lies in identifying the distinction between criminal conduct and regulatory non-compliance and in proposing coordinated preventive responses [15, 19, 33].
2. Definitions and Concepts
2.1. Digital Currency
In the broad sense, digital currencies, cryptocurrencies, and other forms of digitally represented value refer to monetary or financial values that are created, stored, and transferred in electronic environments. Accordingly, any form of value based on digital data and capable of being processed through computer systems may fall within the broad category of digital currency. For example, balances recorded in bank accounts are represented and transferred within banking systems as binary data, although such balances represent official national currency and rest upon legal and institutional foundations distinct from those of cryptocurrencies. The term “digital currency” is therefore conceptually broader and cannot be confined to Bitcoin or other cryptocurrencies [14].
Put differently, digital currency encompasses any form of economic value lacking a physical manifestation and created or exchanged through electronic platforms. Unlike banknotes and coins, such assets have no tangible form, yet they may perform functions such as payment, transfer of value, or the storage of assets. Transfers are often effected rapidly through the Internet and without the geographical constraints ordinarily associated with physical transactions. Virtual currencies and cryptocurrencies constitute two categories within the broader universe of digital currencies; nevertheless, the converse proposition does not hold. Not every digital currency is necessarily a virtual currency or a cryptocurrency. Electronic credits used in computer games, social networks, or particular platforms, for instance, represent forms of digital value with limited spheres of use and do not necessarily possess the characteristics of cryptocurrencies. Some digital currencies, such as Bitcoin and Ethereum, operate through decentralized structures. In such systems, no identifiable central authority is specifically responsible for issuing, controlling, or administering monetary units; rather, the recording and validation of transactions are undertaken through a network of users and technical mechanisms. These assets are consequently often described as “decentralized digital currencies.” Digital currency may thus be understood as a monetary unit or medium of exchange, distinct from physical intermediaries such as banknotes or coins, operating through the Internet and sharing certain characteristics with physical money while enabling immediate and borderless transfers of value between individuals. Virtual currencies and cryptocurrencies are both forms of digital money, but digital money cannot be reduced to these two categories.
2.2. Virtual Currency
Virtual currency should be regarded as one category of digital currency. In other words, the scope of “digital currency” is broader than that of “virtual currency,” and not every digitally represented value necessarily possesses the characteristics of a virtual currency. Cryptocurrencies such as Bitcoin fall within the category of virtual currencies, yet not all virtual currencies can be classified as cryptocurrencies because some lack cryptographic mechanisms and decentralized networks. The United States Internal Revenue Service defines virtual currency as a digital representation of value that may function as a medium of exchange, a unit of account, or a store of value. On this basis, although such currencies lack physical form, they may be used in economic transactions and the transfer of assets. The European Central Bank similarly describes virtual currency as a digital representation of value that is not issued by a central bank, credit institution, or electronic money institution, but may function in practice as a substitute for money. In its 2012 report, the European Central Bank classified virtual currencies, according to their convertibility into official currency and the scope of their use, into three groups, a classification reaffirmed in its 2015 report.
The first group consists of closed virtual values created, distributed, and consumed solely within a defined digital environment, such as a computer game; they therefore cannot ordinarily be used in markets outside that environment. The second group comprises virtual currencies with one-way flows. These currencies may be purchased with official currency, but reconversion into legal tender is either impossible or highly restricted; nevertheless, they may sometimes be used to obtain certain real-world goods or services. The third group comprises convertible virtual currencies characterized by two-way flows. Such currencies may be purchased against official currency at a specified rate and subsequently reconverted into legal tender. Holders may also use them to obtain both digital goods and services and goods and services in the real economy. The European Central Bank has analysed this category as a “means of payment.” The principal distinction between a means of payment and legal tender is that acceptance of legal tender, within the limits prescribed by law, is compulsory for suppliers of goods and services, whereas acceptance of private payment instruments or virtual currencies generally depends upon the consent and agreement of the parties.
2.3. Bitcoin
Bitcoin is a form of cryptographically secured money or virtual currency operating on open-source software and a set of technical protocols. It is designed as a peer-to-peer network and enables private and irreversible payments. This structure allows funds to be transferred internationally for the purchase of goods and services, irrespective of the amount involved, at relatively low cost and sometimes without transaction fees. Bitcoin is often described as an anonymous transactional system; more accurately, however, users are able to preserve a degree of privacy rather than render their identities completely unidentifiable. All Bitcoin transactions are recorded on a public, decentralized, distributed ledger, making transfer information visible to network participants. From the perspective of advocates of economic liberty, Bitcoin is regarded as an alternative to conventional monetary systems, partly because governments and central banks are considered capable of reducing the value of official currencies through monetary expansion. By contrast, security agencies and law-enforcement authorities have repeatedly warned about the use of Bitcoin and other cryptocurrencies in criminal activities. Bitcoin, for example, was used as a payment instrument in illicit transactions on certain hidden online markets, including Silk Road. Bitcoin transaction information is recorded on a public distributed ledger known as the blockchain. Unlike conventional money transfers, which ordinarily require intermediaries such as banks and financial institutions, Bitcoin enables direct transfers of value among network users. Its transfer can therefore occur without an intermediary and through direct communication between sender and recipient. Bitcoin has no physical or tangible existence; it is transferable within the network only as digital data. It may be used to pay for goods and services, transfer value, and make investments [14, 17].
Compared with many other digital assets, Bitcoin has achieved greater recognition and a broader market presence. It can generally be converted into conventional currencies through relevant exchanges and markets, and its larger transaction volume makes it easier to buy and sell than many other cryptocurrencies. Moreover, cryptographic mechanisms and distributed transaction records make tampering with or falsifying payment records more difficult. The limited supply of Bitcoin is also among the factors that may be considered when assessing its long-term value [14, 17].
3. Legislative Background of Digital Currencies in Iran
The regulation of cryptocurrency trading in Iran entered a new phase in 2018 (1397 SH). Prior to that period, there was no specific and clear regulation directly governing the exchange of cryptographically secured currencies, and the legal status of activities in this market remained uncertain. In April 2018, the Central Bank of the Islamic Republic of Iran announced a prohibition on the use of Bitcoin and other virtual currencies within the banking network and financial institutions. The principal rationale was concern over their potential use in money laundering, terrorist financing, and the transfer of proceeds derived from criminal activities. In practice, however, the prohibition faced enforcement limitations because a substantial portion of cryptocurrency transactions occurred outside the direct banking system. Merely notifying banks and credit institutions of the prohibition was therefore insufficient to prevent individuals from participating in the cryptocurrency market. Later, in September 2018, the head of the Center for the Development of Electronic Commerce announced that websites engaged in the online sale of cryptocurrencies had been identified. These websites consisted of a limited number of exchanges and online stores trading crypto-assets at the time. During the same period, officials emphasized the extreme price volatility of cryptocurrencies and their lack of conventional backing, characterizing transactions in these assets as involving significant economic risk [25].
The position described above reflects the early regulatory stage, not the entire subsequent framework. In December 2024, the Central Bank of Iran adopted a policy and regulatory framework for crypto-money, invoking Articles 4, 24, 59, and 64 of the Central Bank Law. The framework addresses the responsibilities of crypto-money brokers and custodial institutions, the need for authorization, reporting duties, and compliance with anti-money-laundering and tax rules. In September 2025, the Bank approved a further directive on the establishment, operation, dissolution, and supervision of crypto-money brokers, reported as comprising 58 articles and 28 notes. These developments do not eliminate every interpretive uncertainty, but they require the 2018 restrictions to be understood historically rather than as an exhaustive description of present law [26, 27].
The legal uncertainty surrounding cryptocurrencies appears to underscore the necessity of coherent and transparent rules specifying the scope of private activities, the duties of exchanges, the responsibilities of supervisory institutions, and the rights of users. The issue assumes additional significance in light of jurisprudential questions concerning the legitimacy and legal effects of cryptocurrency transactions. In the absence of a comprehensive regulatory framework, both financial abuse and legal uncertainty for legitimate market participants may increase. Conceptually, “digital currency,” “virtual currency,” and “cryptocurrency” are not synonymous and occupy distinct fields. Nevertheless, legal literature and regulatory instruments frequently employ the term “virtual currency” to refer to phenomena such as Bitcoin and comparable assets. The emergence of Bitcoin as the first widely successful cryptocurrency encouraged the introduction of other cryptographically based virtual currencies into global financial markets. Although Bitcoin held the dominant share of cryptocurrency market value in 2016, its relative share subsequently declined as new projects emerged and competition intensified. Nonetheless, the growth in overall market capitalization and daily transaction volume reflected the increasing significance of cryptocurrencies within the international financial system.
Consequently, a distinction is necessary between holding or transferring an asset, providing a regulated intermediary service, mining with or without appropriate permits, and using crypto-assets to commit an independently punishable offence. A licensing breach does not automatically establish fraud, money laundering, or another criminal offence. The applicable criminal provision and its constituent elements must be independently identified, consistently with the principle of legality [35].
National legal systems ordinarily define the functions and powers of public and private institutions in economic fields. Virtual currencies and related technologies, however, are novel and heterogeneous phenomena whose legal and practical risks may vary considerably. The first step in addressing them legally is therefore to understand their nature and examine the relevant domestic and international rules. In this respect, the experiences of the European Union, the United States, and countries such as Ecuador, Venezuela, and Russia concerning virtual currencies and central-bank digital currencies may offer useful lessons for the development of an Iranian model. International regulatory initiatives and studies concerning distributed-ledger technology and virtual assets likewise demonstrate the growing importance of this field in financial transactions. Given Iran’s commercial relations with the European Union and the tendency to use the euro in certain external transactions, examination of the Union’s legal approaches is of particular relevance. The history of digital money can be traced to efforts aimed at transferring value electronically and reducing dependence on financial intermediaries. One early example was DigiCash, which used cryptographic knowledge to provide electronic payment infrastructures to banking institutions. Other forms of digital money subsequently emerged, some backed by assets such as gold. E-gold, for example, was launched in the 1990s with gold backing. Liberty Reserve, established in 2006, also allowed users to convert official currencies such as the dollar and euro into digital credit and transfer that credit to other users for a specified fee.
A limited comparison is useful. In the European Union, Regulation (EU) 2023/1114 (MiCA) establishes a framework for crypto-asset markets and service providers, generally applicable from 30 December 2024. Regulation (EU) 2023/1113 separately requires specified information to accompany certain crypto-asset transfers involving regulated providers. These rules are not applicable Iranian law; they illustrate how market supervision and anti-money-laundering traceability may be regulated through distinct but complementary instruments [31, 32].
4. Criminal Use of Digital Currencies
Although digital currencies, particularly Bitcoin, emerged largely to facilitate financial transactions, reduce transfer costs, and create economic opportunities, they—like many modern technologies—possess both legitimate and illicit uses. Cryptocurrencies may therefore constitute both instruments for the commission of offences and objects of criminal conduct. The criminological significance of the issue does not imply rejection of modern financial technologies; rather, it reflects the need to protect legitimate users and prevent their exploitation by offenders. The legal recognition or regulation of cryptocurrencies does not, in itself, create criminality. Many conventional offences, cybercrimes, and even forms of organized crime can be committed through these instruments without the creation of a distinct criminal offence. Offenders may, for example, use cryptocurrencies to transfer illicit proceeds, deceive users, commit extortion, or exchange prohibited goods and services. In practice, law-enforcement and security agencies frequently develop countermeasures only after new forms of criminal conduct have emerged and expanded, because the initiative in devising new methods of offending generally lies initially with perpetrators. This reactive gap is particularly pronounced in cyberspace because of the speed of technological change and the transnational nature of digital communications. Cryptocurrencies, especially Bitcoin, are no exception. The use of digital addresses in place of real-world identities, the difficulty of attributing transactions to specific users, and the complexity of asset-transfer pathways have attracted some offenders to these instruments. Limited public understanding of the technical structure and risks of cryptocurrency transactions can also increase the incidence of fraud, phishing, extortion, and fraudulent acquisition of property [15, 19].
The illicit use of cryptocurrencies has also extended to unlawful online markets. Certain markets accepting Bitcoin or other cryptocurrencies have provided platforms for the supply and demand of prohibited goods and services, including narcotics. A well-known example was the Silk Road website, launched in the United States in 2011, through which users could purchase illegal goods using Bitcoin. Criminal activities facilitated by digital currencies are not confined to financial offences; they may also involve offences against property, public security and public order, and, in some circumstances, offences against persons. Organized offending warrants particular attention because offenders may design more sophisticated and extensive operations whose harmful effects reach society on a broader scale.
Money laundering is one of the most significant forms of organized crime associated with cryptocurrencies. It generally follows a predicate offence and seeks to conceal the illicit origin of assets while presenting them as legitimate proceeds. The use of cryptocurrencies may further complicate detection and prosecution because digital addresses can be used without directly revealing the identity of their holders, value can be transferred rapidly, transactions can cross borders with ease, and the origin and destination of funds may be difficult to establish. Under Article 2 of the Islamic Penal Code and Article 8 of the Code of Criminal Procedure, prosecution in the field of cryptocurrency mining requires that the relevant conduct first correspond to an existing criminal offence. Once a criminal title has been established, investigation and adjudication must proceed in accordance with applicable procedural rules, and the court may render judgment only on the basis of substantive legal provisions capable of supporting such a decision. Restrictions on the importation and use of mining equipment are also justified, among other considerations, by the need to prevent disruption to the electricity grid and avoid imposing substantial costs on public infrastructure. Mining devices consume significant amounts of electricity, and the diversion of subsidized, agricultural, or industrial electricity to cryptocurrency mining may cause losses to the electricity distribution network and the public interest. Large-scale mining operations may also have environmental consequences, including increased energy consumption and indirect emissions. Accordingly, two issues are particularly important: first, the legal status of mining equipment; and second, the manner in which the energy required for mining is obtained and consumed. The relevant forms of unlawful Bitcoin and cryptocurrency mining may therefore be examined under the applicable legal titles.
5. Unauthorized Use of Electricity Connections
Access to services such as water, electricity, gas, telecommunications, and sewage is now regarded as a basic requirement of human life, to the extent that everyday life and many ordinary activities become difficult, and in some circumstances impossible, without them. Public services may therefore be viewed as matters of public law and collective interest, protection of which falls within the functions of the legislature and the judiciary. Given the breadth of social dependence on such services, Iranian legislators have adopted rules at various times to protect public networks and prevent unauthorized use. Some of these provisions are general, while others concern particular services. At present, an important measure is the Law on Criminal Penalties for Unauthorized Users of Water, Electricity, Telephone, Sewage, and Gas, adopted on 31 May 2017 (10/03/1396). Despite certain deficiencies and interpretive ambiguities, the Act plays a significant role in supplementing previous rules and establishing sanctions for unauthorized use of public services. In the context of cryptocurrency mining, the energy required must be supplied through a lawful connection to the national grid or through an independent power plant. Accordingly, where electricity used for mining is obtained unlawfully, the conduct may fall within the scope of the aforementioned legislation. Two principal forms of conduct warrant consideration. First, there is the use of electricity without a lawful connection or beyond the permissible limits of an existing connection. Under Article 1, a person who uses a public utility without obtaining an official connection, or who uses an existing connection unlawfully, is liable, in addition to the cost of consumed services, compensation for damage and other statutory dues, to a monetary penalty. Where the unauthorized use is domestic, the sanction is a degree-six fine under Article 19 of the Islamic Penal Code of 2013. For non-domestic consumption, the offender is liable to a payment equivalent to one to two times the price of the consumed service. In the event of repetition, the maximum prescribed fine may be imposed and the offender’s connection may additionally be disconnected for three to six months [29].
Second, criminal liability may arise from interference with electricity metering equipment. Under Article 2, any person who manipulates or alters meters, consumption-measuring devices, or the electricity network in a manner that disrupts their proper operation or prevents the recording of actual consumption incurs criminal liability. In such circumstances, in addition to restoring the prior condition, paying for consumed electricity, and compensating the resulting damage, the offender may be subject to a degree-six fine under Article 19 of the Islamic Penal Code, provided that the conduct does not satisfy the elements of the offence established under Article 687 of the Islamic Penal Code.
The assessment must therefore distinguish an unauthorized connection, manipulation of a meter, and consumption exceeding contractual or administrative limits. Each entails different factual and legal requirements; substantial electricity consumption, standing alone, does not demonstrate the commission of a criminal offence [29].
6. Threats to Public Health or the Environment
Under Article 688 of the Islamic Penal Code, conduct deemed threatening to public health is prohibited, although the legislature has not exhaustively enumerated the acts falling within the provision. Unless the conduct is subject to a more severe punishment under special legislation, the offender may be sentenced to up to one year of imprisonment. Pursuant to Note 1 to the provision, determining whether conduct has endangered public health or caused environmental pollution falls, depending on the case, within the competence of the Ministry of Health and Medical Education, the Department of Environment, or the Veterinary Organization. The relevant authority also reports the offence. Accordingly, if inspectors or health-network experts, or experts of the Department of Environment, determine that the use of the equipment in question presents a danger to public health or the environment, prosecution under Article 688 may be pursued [28].
Application of Article 688 requires proof of conduct falling within the statutory notion of a threat to public health or environmental pollution, with the competent authority’s assessment where required. Energy demand or indirect emissions, without evidence of the legally relevant harmful conduct and the applicable causal link, should not automatically be treated as establishing this offence [28].
6.1. Damage to Public Electricity Facilities
Under Article 687 of the Islamic Penal Code, any person who destroys, burns, disables, or otherwise sabotages equipment, devices, or facilities intended for public use is punishable by imprisonment of three months to ten years. The provision encompasses a broad range of public facilities, including water, sewage, electricity, oil, gas, telephone and postal networks, telecommunications facilities, radio and television systems, power plants, transmission lines, dams, canals, utility connections, and equipment used for the production, transmission, and distribution of public services. The destruction of traffic signs and other signs installed to protect human life or ensure the safety of infrastructure and roads is likewise covered [28].
Under Note 1 to Article 687, where the foregoing acts are committed with the intention of disrupting public order and security and confronting the Islamic Government, the conduct may constitute the offence of moharebeh and the punishment applicable to the offender may follow. State ownership of the relevant facility is not a prerequisite to the offence under Article 687. The decisive criterion is that the property or facility targeted was established for public use. Accordingly, it makes no difference whether the facility was constructed with public funds, private capital, or a combination of the two, because the characteristic of public use provides the basis for the statutory criminal protection. Given the high electricity consumption of cryptocurrency-mining equipment and the pressure it may place on the grid, where intentional operation of such equipment involves conduct satisfying the elements of damage or disabling of public-use facilities, Article 687 may require consideration, subject to the necessary proof [28].
The application of Article 687 calls for particular caution. The prosecution must establish the conduct and the requisite mental element relating to damage or disabling of facilities used by the public; high energy consumption or ordinary operational strain is insufficient by itself. The aggravated hypothesis mentioned in Note 1 requires separate proof of the additional statutory purpose. A causal and evidentiary analysis is therefore indispensable before the provision is invoked [28].
6.2. Smuggling, Transportation, and Possession of Cryptocurrency-Mining Equipment (Conditionally Permitted Goods)
A — Smuggling through Transportation or Possession of Conditionally Permitted Goods
Under Article 18 of the Law on Combating the Smuggling of Goods and Currency, any person who smuggles, transports, or possesses a conditionally permitted good is, in addition to confiscation of the goods, subject to a fine equal to one to three times their value. Accordingly, where cryptocurrency-mining equipment is imported, transported, or possessed without the required permits and legal formalities, the conduct may fall within this provision.
B — Offering or Selling Smuggled Goods
Under Note 1 to Article 18 of the same Act, the offering and sale of smuggled goods are prohibited. The offender is subject to the minimum sanction prescribed by Article 18, namely confiscation of the goods and a fine equal to their value.
C — Sanctions for Violations by Business Units and Currency Exchanges
Article 18-bis of the Law on Combating the Smuggling of Goods and Currency treats the possession, offering, sale, or smuggling of goods by business units and currency exchanges as a violation. In addition to confiscation of the smuggled goods, the sanctions are graduated according to repetition: first offence, a fine equal to twice the value of the smuggled goods; second offence, a fine equal to four times their value; and third offence, a fine equal to six times their value, together with posting a notice at the place of business indicating the unit’s non-compliance and closure of the premises for six months.
D — Confiscation of Vehicles Used to Transport Smuggled Goods
Under Article 20 of the Law on Combating the Smuggling of Goods and Currency, where a vehicle is used to transport a smuggled conditionally permitted good, the vehicle may be confiscated once the statutory financial thresholds are satisfied. The thresholds depend on the type of vehicle: light ground vehicles, where the value of the discovered goods is at least 100 million rials; semi-heavy ground vehicles, at least 300 million rials; semi-heavy air or sea vehicles, at least 900 million rials; heavy ground vehicles, at least 1 billion rials; and heavy air or sea vehicles, at least 3 billion rials. Where the value of the smuggled goods does not reach the prescribed thresholds, the vehicle is detained. If the convicted person fails to pay the fine within two months after notification of the final judgment, the fine is recovered from the sale of the vehicle and the remaining proceeds are returned to the owner. If smuggling using any of the aforementioned vehicles is repeated at least three times and the aggregate value of the smuggled goods reaches or exceeds the thresholds set by Article 20, the vehicle is confiscated.
The treatment of mining equipment as conditionally permitted goods must be assessed by reference to the classification, permits, amendments, and sanctioning rules applicable at the time of the conduct. Mere possession of equipment cannot be equated, without this examination, with proof of smuggling.
6.3. Money Laundering
Money laundering is a process through which offenders seek to conceal the illicit origin of income and criminal proceeds and give those proceeds an appearance of legality. Offenders employ a variety of techniques for this purpose, and digital assets and cryptocurrencies may serve as instruments for transferring and concealing illicit funds. The principal concepts governing conventional money laundering are equally applicable to cryptocurrency-based laundering. Ordinarily, the process is described in three stages: placement, layering, and integration [15, 30].
A — Placement
At this stage, proceeds derived from criminal activity enter the financial or economic system for the first time. In the cryptocurrency context, an offender may convert illicit proceeds into digital assets or introduce them into the financial transfer system through cryptocurrency-exchange platforms.
B — Layering
Layering comprises a series of measures intended to sever the connection between assets and their unlawful origin. During this stage, funds may be moved rapidly through multiple and complex transactions among wallets, accounts, or platforms in order to obscure the original path of the assets. Although cryptocurrency transactions are ordinarily recorded and visible on distributed ledgers, offenders may use anonymizing services, repeated transfers, and the fragmentation of funds to reduce the traceability of relationships among transactions. Such services are commonly justified on privacy grounds; however, the same features may facilitate the concealment of unlawful conduct [15].
C — Integration
Integration is the final stage of money laundering, in which apparently cleansed assets re-enter the formal economy. In the digital-currency context, an offender may portray illicit proceeds as returns from a successful investment, profits from cryptocurrency trading, or gains attributable to an increase in the value of a digital asset. The true origin of the funds thus remains concealed, while the assets appear legitimate. Regardless of the instrument employed, money laundering rests upon several core characteristics: relative anonymity, speed, complexity, and concealment. Anonymity may facilitate obscuring the criminal origin of funds. Speed permits assets to move within a short period among accounts, persons, and countries. Complexity arises from chains of multiple transactions, while concealment may involve registering funds in the names of apparently legitimate persons or entities and dividing large sums into smaller transactions. The combination of these factors makes the tracing of criminal proceeds more difficult for regulatory and judicial authorities.
These stages describe recurring methods rather than mandatory elements of the criminal offence. Establishing money laundering requires evidence of the relevant unlawful proceeds, the specific prohibited conduct, and the mental element required by applicable law. Public blockchain records may support tracing, but identifying a wallet address is not in itself equivalent to identifying the natural or legal person responsible [15, 30].
6.4. Fraud
In recent years, growing public interest in digital-asset markets and the substantial expansion of cryptocurrency transactions have brought more individuals into the field. As legitimate user activity has expanded, cyber offenders have also paid increasing attention to the market and adopted diverse methods to deceive investors and unlawfully obtain their assets. Features such as the speed of asset transfers, the difficulty of identifying the true identity of transaction parties, and the cross-border character of some transactions make judicial follow-up and the recovery of stolen assets more difficult. The principal forms of fraud in this field include the following: [19]
1. Ponzi, pyramid, and network-marketing schemes
Under these schemes, organizers attract investors by promising fixed returns or exceptionally high yields. Payments made to early participants are generally financed from the contributions of later participants rather than from genuine economic activity.
2. Fake cloud mining and mining bots on messaging platforms
Some websites or bots claim to use users’ funds to purchase mining equipment and mine cryptocurrencies. In many cases, these claims are fictitious and the operation is, in substance, another form of Ponzi scheme.
3. Fake exchanges and wallets
Creating fraudulent platforms for exchanging or storing cryptocurrencies is a common method of stealing users’ assets. Such platforms may cease operating after collecting customers’ funds and cryptocurrencies. Some also impose unusual fees or create barriers to withdrawals, thereby depriving users of access to their assets.
4. Look-alike websites and phishing attacks
In this method, offenders create a website resembling a legitimate exchange, wallet, or platform and provide the victim with a link. By entering confidential information such as passwords, recovery phrases, or private keys, the user may unintentionally provide offenders with access to the account and assets.
5. Fake exchange support
Fraudsters sometimes contact users while falsely presenting themselves as support staff of an exchange or wallet. Under the pretext of resolving an account problem, providing a reward, or completing identity verification, they request personal information, passwords, recovery phrases, or cryptocurrency transfers.
6. Promises of free cryptocurrency
Fraudsters may use the names, photographs, or fake accounts of well-known figures active in technology and cryptocurrency to promise free Bitcoin or other digital assets. Victims are commonly instructed to send a certain amount of cryptocurrency to a designated address first in exchange for receiving a larger amount, although no repayment is made after the transfer.
7. Fake cryptocurrency-mining applications for mobile phones or personal computers
Some applications are advertised as enabling profitable cryptocurrency mining through mobile phones or home computers. Given the limited processing capacity of such devices and the associated costs, many such applications do not perform genuine mining and are instead designed to attract users, display advertising, or collect information.
8. Sale of tokens without real value and sham initial offerings
In this method, offenders present a seemingly innovative project and issue a token lacking economic backing, genuine utility, or a credible implementation plan. They then use extensive advertising to induce uninformed users to purchase it. This method is sometimes described as an ICO scam.
Criminal fraud must be distinguished from investment losses, market volatility, or contractual non-performance. In each case, the investigation should establish the relevant deceptive conduct, attribution to an identifiable offender, causation, and the statutory elements of the offence. Digital evidence, including wallet records and communications, requires reliable collection and contextual assessment [19].
7. Non-Criminal Preventive Measures against Cryptocurrency-Related Offences
7.1. Strengthening Reporting Mechanisms and Transparency in Banks and Exchanges
The identity of transaction parties and the ability to determine the origin and destination of funds are among the most important indicators in assessing whether a financial transaction is suspicious. The Financial Action Task Force (FATF) likewise seeks in its recommendations to strike a balance between preventing the provision of financial services to criminals and preserving the ability to attract legitimate customers. In the banking sector, customer-identification rules and transactional transparency are among the principal tools for combating money laundering. In Iran, amended Article 5 of the Anti-Money Laundering Act, adopted on 5 January 2019 (15/10/1397), requires covered persons and institutions—including the Central Bank, banks, financial and credit institutions, insurers, exchanges, public institutions, and capital-market participants—to comply with the implementing regulations of the Anti-Money Laundering Act and the legislation on combating terrorist financing. Although cryptocurrency transactions frequently take place outside the banking network, recording transactions on the blockchain can enable competent authorities to monitor transfer histories. Unlike conventional bank transactions, access to which often depends on the cooperation of the bank, data recorded on a public blockchain are generally accessible and traceable [30].
The FATF risk-based approach extends anti-money-laundering expectations to virtual assets and virtual-asset service providers, including customer due diligence, registration or licensing where required, and relevant transfer-information obligations. Its July 2026 targeted update identifies continuing deficiencies in effective supervision and emerging risks involving fraud, stablecoins, and transactions through unhosted wallets. The FATF materials provide international standards and comparative guidance; their domestic effect depends on the relevant Iranian legal framework [30, 34].
7.2. Strengthening the Role of Government Institutions Responsible for Combating Financial Crime
Effective criminal policy and the formulation of a coordinated strategy to combat money laundering—whether conventional, cyber-enabled, or cryptocurrency-based—require specialized and centralized management at the national level. In Iran, the Central Bank of the Islamic Republic of Iran is among the principal institutions involved in preventing money laundering within the monetary and banking system. In conventional money laundering, it generally performs preventive functions through public information concerning anti-money-laundering rules and disclosure of authorized institutions; assessment of institutions being established and the qualifications of their founders; and continuous supervision of institutions after authorization. Alongside the Central Bank, Financial Intelligence Units (FIUs) also perform a fundamental role. Operating at the national level, these units receive, analyse, and assess reports concerning suspicious transactions, money-laundering information, terrorist financing, and related financial crimes. Where their analysis reveals credible indications of criminal proceeds or links to terrorist financing, the FIU may disseminate its analytical findings and relevant financial intelligence to the competent authorities for further action. With the growing use of cryptocurrencies, agencies responsible for combating financial crime must draw upon experts in cyberspace, blockchain technology, and digital assets. Sporadic and case-by-case responses to cryptocurrency money laundering are inadequate to address the complexity and speed of developments in this field. A structured, expertise-driven approach based upon a defined national strategy is therefore necessary for preventing and responding to criminal misuse of digital currencies [30].
The value of financial intelligence lies in analyzing suspicious-transaction information and disseminating actionable findings to competent agencies; this function should not be confused with the judicial determination of criminal liability [30].
7.3. Strengthening the Role of Private Organizations
In addition to governmental bodies responsible for detecting, analysing, and prosecuting financial offences, private-sector participation is highly significant in combating cryptocurrency-related money laundering. Because cryptocurrency technologies have largely developed outside traditional governmental structures and within private ecosystems, much of the relevant technical knowledge and practical experience is initially concentrated among developers, technology companies, and independent specialists rather than public institutions. Improving the quality and effectiveness of efforts against cryptocurrency money laundering is therefore difficult without drawing upon specialized individuals and private firms active in blockchain and transaction analysis. Such actors can assist law-enforcement, judicial, and regulatory authorities by tracing asset flows, analysing blockchain data, identifying anomalous patterns, and preparing specialist reports. For example, CipherTrace was established in 2015 in Menlo Park, California. Its activities have included collecting and analysing cryptocurrency transaction information and identifying transfers suspected of money laundering or other criminal activity. By providing blockchain-analysis tools, such companies contribute to improving the security of crypto-assets and reducing opportunities for abuse of distributed-ledger technology. Institutional and security-sector support for or cooperation with such companies further illustrates the importance of private-sector expertise in this field. Accordingly, the private sector, because of its technical knowledge, practical experience, and analytical tools tailored to the particular characteristics of cryptocurrencies, can become one of the most effective partners of public institutions in preventing, detecting, and combating money laundering and other digital-asset-related offences [24].
7.4. Legal Recognition of Virtual Money by the Legislature
Regulation and legal recognition of digital currencies do not affect criminal law alone; they also extend into public, tax, banking, and commercial law. For example, taxation of cryptocurrency transactions and the prevention of tax evasion become practicable only when the legislature assigns assets such as Bitcoin a defined legal status. From this perspective, digital currencies may also be examined within public law because of their relationship to the public interest, financial oversight, and state revenue. One explanation for the regulatory disorder surrounding virtual money is the lack of sufficient foresight in earlier legislation: a substantial portion of the existing legal framework predates the emergence and expansion of phenomena such as Bitcoin and therefore provides no clear response to the issues they generate. Debate over the legal status of digital currencies nevertheless continues among legal scholars and legislative institutions, and divergent approaches remain. In the United States, for example, some commentators emphasize constitutional and statutory powers concerning the issuance of official money. This does not, without further analysis of the relevant legal rules, entail that every form of privately issued digital value is unlawful. Conversely, the absence of a clear legal framework for cryptocurrency transactions may create opportunities for criminal exploitation, including attempts by offenders to argue that the transfer of cryptocurrency does not constitute a financial transaction. Legal recognition and regulatory visibility of digital currencies can therefore facilitate taxation, enhance transparency, and establish a foundation for the application of control mechanisms used in electronic banking. These measures may contribute materially to the prevention, detection, and prosecution of financial crimes, including money laundering.
Regulatory recognition must nevertheless remain distinct from criminalization: the desirability of licensing, taxation, or investor protection does not, without a penal norm, justify punishment. Legal certainty is better served by specifying obligations and sanctions in advance, rather than extending existing offences by analogy.
8. Conclusion
The expansion of information technology and its growing penetration into everyday life have generated not only positive and facilitative effects but also certain social and economic vulnerabilities. Cyberspace, as a product of these developments, provides a setting for the commission of emerging offences as well as new forms of conventional criminality. Digital and cryptographically secured currencies, relatively novel phenomena in the financial sphere, have in recent years gained broad acceptance and use. Their significance is not confined to economic effects; their capacities and risks must also be examined through the lens of criminology and criminal justice. The objective is to prevent the harm that may result from the criminal exploitation of virtual money. The technical and digital character of cryptocurrencies, combined with their potential use in unlawful conduct, has elevated the importance of criminal investigation in this field. The issue becomes even more significant when the characteristics of cybercrime converge with the complexity of organized crime such as money laundering.
Money laundering generally occurs after a predicate offence and is frequently carried out in an organized manner. Identifying laundering flows may therefore assist in uncovering predicate offences and broader criminal networks. Nevertheless, tracing cryptocurrency-based money laundering presents numerous technical and legal challenges. The relative anonymity of users, rapid transfers, the cross-border nature of transactions, and the need for specialized knowledge in analysing blockchain data are among the principal difficulties. Although police and other security bodies may not yet possess optimal equipment, technical knowledge, or practical experience, cryptocurrency systems are not inherently untraceable. Existing capacities, including records preserved on blockchains, can be employed for criminal detection.
Effective responses to digital-currency-related crime require expanded cross-border cooperation, the exchange of experience among states, and the adoption of a comprehensive strategy to strengthen the capacities of responsible institutions. This strengthening should take place in both the public and private sectors. Although the detection of crime and prosecution of offenders remain governmental responsibilities, technology companies, exchanges, and other private actors can facilitate criminal investigation by implementing preventive measures and adhering to security standards.
In Iran, future criminal policy and the development of criminal regulations in this field must likewise be formulated with due regard to the difficulties of crime detection in cryptocurrency environments. The expanding use of digital assets, their particular technical characteristics, and the increasing sophistication of offending methods require legislators to draw upon expertise in criminal law, criminology, information technology, and blockchain analysis. Otherwise, the drafting of rules capable of satisfying the operational needs of police and other law-enforcement authorities in preventing, detecting, and prosecuting cryptocurrency-related crime will remain seriously constrained. Growing misuse of cryptocurrencies may contribute to the expansion of money laundering and associated offences, including terrorist financing. The rapid alignment of criminal sciences with emerging forms of criminality is therefore essential [30].
From the standpoint of Iranian criminal law, the mere purchase, sale, or possession of Bitcoin or other cryptocurrencies does not constitute a criminal offence so long as the legislature has not established a criminal title and a corresponding penal sanction for such conduct. This conclusion derives from the principle of legality of crimes and punishments, reflected in Article 2 of the Islamic Penal Code. Under that principle, no act or omission may be treated as a crime unless the law has prescribed a punishment or a security and correctional measure for it. Nevertheless, where conduct involving cryptocurrencies gives rise to offences such as fraud, unauthorized access, theft of data or assets, hacking, breach of trust, injured persons may seek the judicial remedies available under the applicable criminal law. A separate breach of contractual obligations may instead give rise to civil remedies, unless the facts independently satisfy the elements of an offence [35].
Accordingly, the Government and the Islamic Consultative Assembly should address the field through a forward-looking approach before the adverse consequences of regulatory uncertainty become widespread. Where cryptocurrency activities are considered compatible with the country’s economic and legal interests, a transparent framework should be adopted governing activity, supervision, user protection, and responses to abuse. Where restriction or prohibition is considered necessary, it should be based upon clear and enforceable legislation accompanied by public information. Rather than relying upon informal and conflicting statements, the country requires comprehensive and precise laws and regulations grounded in the technical realities of the field and communicated transparently to citizens. Only through coherent regulation can a workable balance be achieved between legitimate use of emerging financial technologies, protection of the public interest, and prevention of crime.
The preceding analysis therefore supports three priorities: clearly differentiating regulatory breaches from punishable offences; establishing evidence-based procedures for linking wallet activity to identified persons and unlawful proceeds; and coordinating licensed intermediaries, financial-intelligence bodies, and technical experts under a proportionate, risk-based framework. These priorities are preventive and legislative recommendations, not findings derived from a quantitative assessment of crime levels [30, 34].
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