Iranian President Masoud Pezeshkian has reportedly submitted a resignation letter citing the Islamic Revolutionary Guard Corps’ effective takeover of large portions of the government, according to an anonymous official who spoke with Iran International. The claims remain unverified, but if true, they would mark a dramatic fracture at the top of Iran’s political hierarchy during a period of active military conflict with the US and Israel.

Inside the power struggle

Tensions spiked in May 2026 when the IRGC carried out unauthorized strikes on the UAE, a move Pezeshkian publicly labeled as “madness.” Pezeshkian had reportedly first considered resigning back in mid-March 2026, amid the death of key figures and wartime pressures. In late May, he ordered the restoration of international internet access, a move that directly contradicted IRGC-affiliated media.

Pezeshkian, who entered office as a reformist figure pushing for diplomatic engagement and economic normalization, found himself governing a country where the most consequential decisions were being made by people he couldn’t control.

The IRGC’s crypto empire

The IRGC was responsible for approximately 50% of Iran’s identified on-chain crypto activity in Q4, a figure that includes both mining operations and the laundering of funds through decentralized channels. Iran has been one of the most active state-level participants in crypto mining, partly because subsidized electricity makes it economically attractive, and partly because sanctions have made traditional financial channels nearly impossible to use.

US authorities have responded with increasingly aggressive enforcement. Numerous IRGC-linked crypto wallets have been sanctioned, and significant actions have included the freezing of hundreds of millions in USDT. Tether’s cooperation with law enforcement on freezing sanctioned addresses has made stablecoins a less reliable tool for circumventing financial restrictions.

What this means for investors

If Pezeshkian’s resignation triggers a consolidation of power by IRGC hardliners, expect the sanctions regime to intensify further. That means more wallet blacklists, more USDT freezes, and potentially broader enforcement actions against exchanges and protocols that have facilitated IRGC-connected flows. OFAC designations have a way of cascading — one sanctioned wallet connects to another, which connects to a liquidity pool, which connects to a DEX that suddenly has a compliance problem it didn’t know about. The Tornado Cash precedent demonstrated that US authorities are willing to target protocols, not just individuals.

The reports remain unverified, and opposition media has obvious incentives to amplify narratives of internal collapse. But the underlying tensions between Pezeshkian and the IRGC are well-documented through his own public statements.