In 2025, the influx of funds into Iranian cryptocurrency trading platforms has declined due to a collapse in nuclear discussions with Israel, a $90 million breach of Iran’s largest crypto exchange, and a significant stablecoin blacklisting, according to blockchain analytics firm TRM Labs.
During the first seven months of the year, Iranian crypto flows reached $3.7 billion, marking an 11% decrease from the same timeframe last year, with the steepest decline occurring in June and July, TRM Labs reported on Tuesday.
“This downturn coincided with a breakdown in nuclear negotiations, a 12-day conflict with Israel starting June 13, and pervasive power outages in Iran, fueled by a mix of Israeli kinetic and cyber operations, along with regime-initiated shutdowns.”
Iran’s crypto inflows began a steep decline in June, right after the $90 million hack of Nobitex, which accounts for 87% of the nation’s crypto transactions.
A large segment of Iranians depend on US dollar stablecoins as a means of preserving value amid soaring inflation and to navigate stringent sanctions, essentially isolating the nation from the global economy.
Nobitex breach significantly affected Iran’s crypto landscape
Trust in local virtual asset service providers (VASPs) waned following the security lapse at Nobitex, orchestrated by the pro-Israel group Predatory Sparrow on June 18, when relations between Iran and Israel were particularly tense.
Even though Nobitex continues to lead in transaction volume, the event disrupted liquidity, delayed transaction processing, and temporarily redirected users to alternative exchanges, as noted by TRM.
Percentage of crypto transaction volume among Iranian VASPs from January to July. Source: TRM Labs
Escalating tensions between Iran and Israel further intensified the outflows, soaring over 150% in the worst week; a significant portion of this volume flowed into high-risk foreign exchanges with minimal Know Your Customer checks, according to TRM.
Tether’s blacklisting hindered flows
Stablecoin provider Tether performed its most extensive freeze of Iranian-linked funds, blacklisting 42 crypto addresses holding Tether (USDT) balances on July 2.
This event triggered a collective effort from Iranian exchanges, influencers, and state-sponsored media to urge users to offload their TRON-based USDT holdings — the most commonly utilized network and token in Iran — and transfer assets to Dai (DAI) on Polygon.
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Many ordinary Iranians remain reliant on cryptocurrency as a safeguard against inflation, underscoring Iran’s heavy dependence on stablecoins, TRM stated.
Iran continues to leverage crypto for political purposes
Iran is still utilizing cryptocurrency to acquire sensitive goods from Chinese chip vendors, including hardware essential for artificial intelligence, drone parts, and other electronic devices, effectively a means to evade sanctions, TRM observed.
Additionally, it has employed cryptocurrency to fund espionage activities with foreign agents, according to the analytics firm.
However, illicit crypto transactions in Iran account for less than 1% of the overall volume.
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