Iran airstrikes trigger 700% outflow of cryptocurrencies, internet blackout suppresses capital flight

After the United States and Israel launched airstrikes against Tehran, Iran’s largest cryptocurrency exchange Nobitex experienced a surge in crypto asset withdrawals within minutes of the first attack, increasing by over 700%. During that day, the hourly outflow nearly reached $3 million. However, as the Iranian government implemented strict internet blockades, nationwide network connectivity dropped by approximately 99%, and subsequent crypto outflows rapidly subsided.

Analysis of Nobitex’s Outflow Data Post-Airstrike

(Source: Elliptic)

Nobitex is Iran’s largest cryptocurrency exchange, handling about 87% of the country’s crypto trading volume. In 2025, it served over 11 million users and processed approximately $7.2 billion in transactions. According to an analysis report released by Elliptic on Monday:

Immediate response after the airstrike: Within minutes of the first strike, Nobitex’s crypto outflows surged over 700%, exceeding $500,000.

Peak intra-day: Later that day, the highest hourly outflow approached $3 million.

Subsequent trend: As internet restrictions were enforced, outflows sharply declined to near halt.

Elliptic’s preliminary tracking indicates that a large amount of outbound funds was transferred to foreign crypto exchanges. The company states this “enables funds to be moved out of Iran while avoiding some scrutiny from the global banking system.”

Diverging Assessments by Elliptic and TRM: Capital Flight or Blockade Effect?

Two major crypto forensic firms have drawn very different conclusions from the same data:

Elliptic’s stance: The sharp increase in outflows “may represent capital flight from Iran,” and the pattern of funds flowing to overseas exchanges aligns with risk-averse capital transfer behavior.

TRM Labs’ rebuttal: “There are no signs of accelerated growth or capital flight in Iran’s crypto ecosystem. Instead, with the government’s strict internet blockades, trading volume and value have declined.” TRM believes that after the initial short-term surge, Iran’s internet connectivity dropped about 99%, fundamentally cutting off subsequent fund transfer channels. Overall data suggests “market paralysis caused by blockade,” rather than ongoing capital outflows.

This disagreement centers on how to interpret the initial capital movements within minutes after the strike—whether they represent organized capital flight or panic-driven reactions that were later halted by network shutdowns.

Structural Context of Iran’s Cryptocurrency Dependence

Iranian reliance on cryptocurrencies is not incidental but a long-term strategic response to financial sanctions and a fragile banking system. Recent banking crises have further reinforced this trend: in October 2025, Ayandeh Bank, one of Iran’s largest private banks, went bankrupt after incurring losses of $5.1 billion and liabilities close to $3 billion, affecting over 42 million customers. The Central Bank of Iran warned that without reforms, eight other local banks face dissolution.

Against this backdrop, platforms like Nobitex have become vital tools for Iranians to evade sanctions, preserve assets, and conduct cross-border transfers. However, these platforms also face security risks: in June 2025, Nobitex was targeted by a hacker attack involving up to $81 million.

Frequently Asked Questions

Q: Does the 700% surge in Iranian crypto outflows confirm “capital flight”?
Currently, two leading blockchain analysis firms hold different views. Elliptic suggests the initial data points to capital flight, while TRM Labs argues that the rapid return to normal after the surge better fits an explanation of market activity being forced to halt due to government internet shutdowns, rather than systematic organized capital transfer. Definitive conclusions require further on-chain data analysis once the situation stabilizes.

Q: How does a 99% network outage affect cryptocurrency usage?
Crypto transactions require network connectivity for broadcasting, verification, and confirmation. When Iran’s internet connectivity drops by about 99%, users holding crypto assets are nearly unable to complete transactions, withdrawals, or transfers. This fundamentally cuts off the use of cryptocurrencies as a tool for capital transfer during crises, directly limiting the scale of capital outflows.

Q: Why do Iranians rely heavily on cryptocurrencies outside the banking system?
Due to extensive US-led sanctions, Iran has long been cut off from the global banking settlement system (including SWIFT), with strict restrictions on cross-border fund transfers. Additionally, Iran’s domestic banking system faces structural issues like high bad debt and currency devaluation, making it difficult for citizens to preserve wealth through traditional financial channels. The decentralized nature of cryptocurrencies makes them an alternative for some Iranians to store and transfer wealth.