A month earlier than bombs fell on Iran, Reuters reported that the US Treasury was investigating whether or not crypto platforms had helped Iranian officers evade sanctions. When airstrikes started on February 28, that investigation obtained a reside stress check — and the outcomes have been revealing.
The battle didn’t break Iran’s crypto infrastructure — it proved how indispensable stablecoins have turn into to it.
Earlier than the Strikes: A $10 Billion Shadow Financial system
Reuters reported in early February that Iran’s crypto transaction volumes had hit an estimated $8–10 billion in 2025, citing TRM Labs and Chainalysis. Nobitex, Iran’s largest crypto alternate, alone serves roughly 15 million customers. However the headline numbers masked a extra vital growth beneath.
UK-based analytics agency Elliptic informed Reuters it had discovered that Iran’s Central Financial institution acquired at the very least $507 million in USDT final yr — what it referred to as a “sophisticated strategy to bypass the global banking system.” Chainalysis estimated that half of Iran’s crypto volumes have been linked to the Islamic Revolutionary Guard Corps (IRGC). TRM put the determine decrease at round 5%, however had nonetheless recognized over 5,000 IRGC-connected pockets addresses which have moved $3 billion since 2023.
Individually, a TRM Labs report revealed in January revealed that two UK-registered firms, Zedcex and Zedxion, had funneled $619 million in stablecoins to wallets linked to the IRGC in 2024 alone — a 2,500% improve from the prior yr.
“This is not opportunistic crypto misuse — it’s a sanctioned military organization operating exchange-branded infrastructure offshore,” TRM’s world head of coverage Ari Redbord stated.
What Warfare Revealed
In response to a TRM Labs evaluation revealed shortly after the strikes, Iran’s web connectivity dropped by roughly 99% when US-Israeli strikes hit on February 28. Crypto transaction volumes collapsed by 80% inside days. Exchanges shifted into defensive mode — some suspended withdrawals solely, others froze withdrawals in each crypto and rial (Iran’s nationwide forex), and several other moved to twice-daily batch processing.
However essentially the most telling transfer got here from Iran’s Central Financial institution, which directed exchanges to quickly halt buying and selling within the USDT-toman pair in a single day. The toman, a generally used denomination of the rial, serves as the first bridge between crypto and fiat in Iran.
With panic driving Iranians to swap rials for dollar-pegged USDT, the pair was successfully turning into a real-time gauge of forex collapse. Halting it was the Central Financial institution’s try and gradual that repricing — the crypto equal of shutting down a international alternate market throughout a disaster.
When buying and selling resumed, order books have been skinny, and costs briefly dislocated — indicators of a market struggling to operate with out its most important pair. The episode underscored simply how deeply USDT had embedded itself in Iran’s monetary plumbing.
TRM’s general evaluation: “evidence of stress, not failure.” Iran’s crypto ecosystem shrank however didn’t break.
However TRM added a caveat: peculiar Iranians misplaced entry when the web went darkish, however state-linked actors could not have. The general drop in quantity might be masking quieter strikes by regime-connected gamers repositioning funds by way of no matter infrastructure remained on-line — one thing TRM stated would “likely reveal itself in time” as transaction-level information is analyzed.
FATF Connects the Dots
Days after TRM revealed its findings, the Monetary Motion Process Power launched a focused report on stablecoins and unhosted wallets on March 3. The timing was notable.
The FATF report cited Chainalysis information displaying stablecoins accounted for 84% of all illicit crypto transaction quantity in 2025. It explicitly named Iranian actors leveraging stablecoins for proliferation financing and really helpful that issuers undertake freeze, burn, and deny-listing capabilities.
With over 250 stablecoins in circulation and market capitalization exceeding $300 billion, the FATF urged nations to implement “proportionate and effective mitigating measures” — an acknowledgment that the majority jurisdictions have but to construct regulatory frameworks particularly addressing stablecoin dangers.
The Paradox
Iran’s case exposes a elementary stress within the stablecoin ecosystem. USDT’s greenback peg — the identical characteristic that makes it helpful for legit cross-border funds — additionally makes it the instrument of alternative for sanctions evasion. Tether maintains a “zero-tolerance policy toward criminal use,” however as RUSI’s Tom Keatinge informed Reuters in February: “The harder one squeezes the Iranian economy, the more one better be ready to deal with the consequences, one of which is the expanding use of crypto.”
The battle didn’t create Iran’s dependence on stablecoins. It merely made it not possible to disregard.
