LONDON (Reuters) — The sons of a powerful family with close ties to Iran’s new supreme leader control the country’s largest cryptocurrency exchange, transforming it from a startup into a conduit to the global economy used by both blacklisted state institutions and ordinary citizens.

Nobitex was founded in 2018 by brothers Ali and Mohammad Kharrazi under an alternative family name. It claims 11 million users, more than 10% of Iran’s population. While Iran is subject to blanket Western economic sanctions, the exchange has avoided being designated by the United States and its allies.

Locked out of international banking and facing a devalued rial and rampant inflation, ordinary Iranians use the exchange to buy and hold…