US sanctions targeting Iran-linked cryptocurrency wallets have intensified scrutiny of Tehran’s digital asset ecosystem, where crypto has become both a financial refuge for ordinary Iranians and a suspected channel for state-linked efforts to bypass international restrictions. The action froze $344 million in digital assets tied to a network of Iran-linked crypto wallets, as Washington sought to increase economic pressure on Tehran amid negotiations to end the war.
The move came against the backdrop of a sanctions-hit economy in which many Iranians have turned to cryptocurrency to preserve the value of salaries and savings. Iran’s rial has lost about 90 percent of its value since 2018, and the country has long been barred from accessing large parts of the international financial system. That isolation has helped create a local crypto ecosystem used as an alternative financial route outside traditional banking channels.
Crypto Becomes a Sanctions Workaround
Iran’s crypto ecosystem was valued at more than $7.78 billion last year, according to crypto transaction monitoring firm Chainalysis. The data cited in the screenshots suggests that cryptocurrency has not only been used by citizens coping with inflation and a weakening currency, but also by state-linked actors seeking to move funds beyond the reach of conventional oversight.
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The Islamic Revolutionary Guard Corps accounted for about half of on-chain activity in the fourth quarter, according to the account cited in the report. Crypto was described as harder to trace and easier to transfer than traditional bank payments, making it useful for selling oil, buying weapons and commodities, and paying for imports despite sanctions.
In early April, Iranian authorities reportedly said oil ships seeking passage through the Strait of Hormuz would be asked to pay a toll in cryptocurrency. Reports also emerged that Iran had already received crypto payments from ships transiting the strait.
US Moves to Freeze Digital Assets
The United States Treasury action followed wider concerns that Iran-linked crypto activity had become part of a broader financial contest between Washington and Tehran. US Treasury Secretary Scott Bessent said on X that Washington would “follow the money” Tehran was attempting to move outside the country and target financial lifelines tied to the regime.
Before freezing hundreds of millions in cryptocurrency, the Office of Foreign Assets Control had in January sanctioned two UK-registered companies, Zedcex and Zedxion, which were described as unauthorised crypto exchanges. They were accused of helping facilitate financial activity that allowed Iran to evade sanctions, according to Elliptic.
Kaitlin Martin, a senior intelligence analyst at Chainalysis, said jurisdictions subject to heavy sanctions naturally gravitate toward cryptocurrency because it provides alternative access to finance. She also said the estimate that the IRGC holds about half of crypto activities likely reflects only a fraction of the true extent of authority-controlled wallets, as many have not yet been identified by regulators.
War, Cyberattacks and Crypto Outflows
The screenshots also describe a sharp rise in cryptocurrency movement around military conflict. Just 12 hours before the United States and Israel began attacking Iran in late February, Firouz, a crypto user in Tehran, moved his crypto savings out of Nobitex, Iran’s largest digital asset platform, and into a personal digital wallet. He said he feared losing true ownership of money left in a state-linked or state-monitored Iranian crypto service in the event of war, either through state action or cyberattacks.
Monitoring groups detected about $10.3 million in cryptoasset outflow between February 28, when joint US-Israel strikes hit Iran, and March 2, according to a Chainalysis report cited in the screenshots. Some of the wallets used during the surge were linked to the IRGC.
Other firms also reported major movement around conflict. TRM Labs identified a more than 150 percent spike in outflows from Nobitex before Israel’s 12-day war in June 2025. Elliptic said outgoing transaction volumes from Nobitex surged by 700 percent within minutes of the first US-Israeli attack last June.
On June 18, $90 million in cryptoassets stored in Nobitex were stolen in a cyberattack widely attributed to the Israel-linked group Predatory Sparrow. The stolen cryptoassets were destroyed by sending them to a wallet with no known private keys.
The Central Bank of Iran bought more than $500 million in USDT last year, according to a January report by Elliptic cited in the screenshots. The report said the purchase indicated a sophisticated strategy to bypass the global banking system. At the same time, internet restrictions, distrust of state-linked entities and cyberattacks have made it harder for ordinary Iranians to trade in cryptocurrencies, leaving them caught between sanctions, state control and the risks of a volatile digital financial system.
