Iranian Crypto Exchanges See Outflows Surge as US and Israel Strike

Iranian cryptocurrency exchanges saw outflows surge sharply a few hours after the United States and Israel carried out strikes in the region on Saturday. Citing Reuters, two blockchain analytics firms documented a sharp spike, though the exact motive behind the fund movements has yet to be confirmed. American blockchain analytics firm Chainalysis said funds leaving Iran’s crypto exchanges surpassed $2 million in just one hour after the strikes began, with early reports of the attacks first appearing around 06:15 GMT. In total, crypto assets worth $10.3 million were recorded as leaving Iranian exchanges over the period Saturday to Monday, according to Chainalysis data. The surge underscores crypto’s growing role in Iran, with researchers noting that activity in digital assets in the country tends to rise during geopolitical shocks. Although estimates vary, crypto transaction volumes in Iran are projected to reach $8-11 billion in 2025. Both state-affiliated actors and retail investors are said to be using crypto as an alternative to the conventional financial system. The United States has previously investigated the possibility that several crypto platforms are used to bypass sanctions on Iranian officials. However, the identity of the actors behind the latest flows cannot yet be confirmed; cryptocurrency wallet addresses are pseudonymous and recorded only as strings of letters and numbers on the blockchain, making it difficult to trace real owners. It is possible exchanges are reorganising liquidity or trying to reduce their on-chain footprint, or state-affiliated actors may be using mainstream platforms to move funds. ‘Part of the flows almost certainly come from ordinary Iranians moving funds in response to rising risk,’ Chainalysis said. ‘But others may be exchanges reorganising liquidity or trying to reduce their on-chain visibility, or state-affiliated actors using mainstream platforms to transfer funds,’ it added. Elliptic said early tracking shows the funds flowing to foreign crypto exchanges and potentially reflecting capital flight. Yet another blockchain research firm, TRM, said the flows on Nobitex more reflect activity under pressure than signs of systemic capital flight. Although crypto remains a small part of the global financial system, the IMF expects its use to rise further, especially in developing countries with relatively weak currencies.