In the wake of recent U.S.-Israeli military actions against Iran, beginning around February 28, the country’s cryptocurrency landscape has shown resilience but also significant strain, according to blockchain analytics researchers at TRM Labs. Rather than sparking a surge in activity or mass capital exodus, the escalating conflict has led to a marked contraction in crypto transactions, highlighting how external pressures and internal controls are reshaping digital asset usage in one of the world’s most active crypto economies.
Iran’s crypto sector processes billions in value annually, serving as a critical alternative to traditional banking amid ongoing sanctions and economic instability.
TRM Labs reports that from early 2025 onward, total inbound and outbound crypto flows linked to Iran exceeded $11 billion, underscoring the scale of this shadow financial system.
However, the recent strikes prompted a defensive shift: transaction volumes plummeted by about 80% between February 27 and March 1.
This downturn wasn’t driven by panic selling but by government-imposed internet shutdowns, which crippled access for retail users, automated systems, and exchange operations.
Local exchanges, such as Nobitex—the dominant player in Iran’s market—saw modest fluctuations in inflows and outflows, with an uptick of roughly $3 million on February 28 compared to the prior day.
Yet, these movements fell within typical ranges and didn’t signal widespread flight.
A notable $40 million transfer from cold storage was similarly classified as routine internal management, not an anomaly tied to the conflict.
Broader on-chain data revealed shrinking inbound and outbound flows, smaller transaction sizes, and reduced market liquidity, all symptoms of a system under duress from connectivity issues and risk-averse policies.
Stablecoins, particularly Tether (USDT) paired with the Iranian toman (rial), play a pivotal role in bridging crypto and fiat in Iran.
During the height of tensions, major platforms like Nobitex, Wallex, Bitpin, and Tabdeal temporarily suspended trading in this key pair under directives from Iran’s Central Bank.
This halt aimed to stabilize fiat pricing amid volatility but resulted in thin order books upon resumption, causing brief price distortions and liquidity shortages.
Exchanges responded proactively: Nobitex reversed erroneous liquidations, Bitpin offered user compensations, and Tabdeal deployed internal safeguards to avert broader disruptions.
The Iranian regime’s growing reliance on cryptocurrencies for evading international sanctions adds another layer of complexity.
TRM Labs points to historical examples, such as the now-sanctioned exchange Zedcex, which handled over $1 billion in stablecoin transactions potentially linked to state actors like the Islamic Revolutionary Guard Corps.
While the current crisis hasn’t shown clear signs of accelerated illicit flows, the infrastructure’s dual use—for everyday economic survival and potential shadow operations—remains a concern for global regulators.
Comparatively, this response mirrors past events, including the 2025 summer clashes with Israel and domestic protests, where internet blackouts—dropping connectivity by up to 99%—led to similar operational halts.
Exchanges adapted by batching withdrawals, securing assets in cold storage, and advising caution, preventing a full meltdown but exposing vulnerabilities in a market already isolated from global finance.
Overall, TRM Labs‘ insights suggest Iran’s crypto market is enduring rather than thriving under conflict. Normalization hinges on restored stability, but the episode underscores crypto‘s role as both a lifeline and a liability in sanctioned economies.