Iran’s cryptocurrency market has taken a major hit in 2025, with trading flows falling 11% as tensions with Israel escalate and a massive hack shakes confidence in local exchanges.
According to blockchain analytics firm TRM Labs, Iranian crypto flows reached $3.7 billion between January and July, down from last year’s levels.
The biggest drop occurred in June and July when nuclear talks collapsed, a 12-day war with Israel, and power cuts in Iran. TRM Labs noted that Israeli cyber and kinetic operations, combined with government shutdowns, fueled the downturn.
Adding to the turmoil, Nobitex, Iran’s largest crypto exchange handling 87% of the country’s transactions, suffered a $90 million hack on June 18.
The hacking, which was done by a pro-Israel hacking group known as Predatory Sparrow, caused liquidity to slow down, transactions to slow down, and users to go to riskier foreign exchanges with lax KYC procedures.
The heat was added in July when stablecoin issuer Tether blacklisted 42 addresses associated with Iran, locking up millions of USDT. This action caused a stampede of Iranians to sell their TRON-based USDT and switch to Dai on Polygon.
Despite the setbacks, crypto remains vital for many Iranians. With soaring inflation and tough sanctions cutting off access to the global financial system, people continue to rely on stablecoins as a safe store of value.
TRM Labs added that Iran also uses crypto for political purposes, including buying sensitive goods from China and funding espionage, though illicit activity makes up less than 1% of total volume.
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