ICE protests surveillance yet uses tech to track citizens' devices, possibly violating privacy laws and the Fourth Amendment, revealed through ICE's data tools.

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Iran’s on-chain crypto activity surged to about $7.80 billion in 2025, driven in large part by mass protests that began in late December 2025.

According to Chainalysis, the rise reflects both ordinary people moving assets out of banks and state-linked actors shifting funds on blockchain networks.

The shift was sharp and sudden; many withdrawals moved from local exchanges into personal wallets as people looked for ways to safeguard savings.

Iran Protests Push People Toward Bitcoin

Based on reports, Bitcoin withdrawals from Iranian exchanges rose noticeably during the unrest. Some transfers happened in short, intense bursts when internet access was still available.

Many Iranians chose self custody — sending crypto to private wallets rather than keeping it on exchanges — as the rial lost value and access to traditional finance tightened.

Inflation in the country was reported at about 40–50% in recent months, which helped push more households to seek alternatives for storing value.

State Actors And Civilian Use Diverge

Chainalysis data shows complexity in the flows. Addresses linked to the Islamic Revolutionary Guard Corps were tied to roughly half of the total crypto volume received in Iran during Q4 2025.

That does not mean ordinary use did not rise — it did. But the numbers point to crypto serving different roles at once: it can be a shelter for households when local currency collapses, and it can be a channel for state-linked actors to move funds. Analysts warn that these two uses can mask one another in on-chain tallies.

People acted quickly. When banks and payment systems were uncertain or blocked, crypto offered a way to move value across borders without the usual banking rails.

Some transfers were small. Others were larger, tied to families or businesses trying to protect capital. According to the sources, these spikes in activity coincided with other significant occurrences involving geopolitical crises and specific cyber attacks that contributed to the erosion of faith in the local infrastructure.

The Iranian government has imposed internet blackouts in response to the escalating protests. By controlling the online access, Iranians resorted to the windows of opportunity to transfer money. The transfer of money to private accounts became a common practice during the online windows.

That pattern — brief but intense bursts of withdrawals — shows how people adapt quickly to changing conditions. It also explains why on-chain volume readings jumped so high in 2025.

The $7.78 billion number measures on-chain crypto volume tied to Iranian activity over the year, not the market value of holdings inside the country. Based on reports, that figure captures a mix of ordinary transfers, commercial activity, and movements linked to sanctioned entities.

Featured image from Stringer/Via Reuters, chart from TradingView

EXPERT OPINION — I am closely watching the growing size and momentum of protesters across Iran’s cities, rural areas, and pious communities who are bravely and vocally rejecting the Supreme Leader’s broken policies. They have shined a light on Khamenei’s gross mismanagement of the economy and the severe multi-year drought; his constant agitation and hostile relations with neighbors; Iran’s loss of prestige and influence with coreligionist communities in Lebanon, Iraq, and Syria; his failures against foreign attacks; and his misguided alliance with Russia against Ukraine. Even regime loyalists have begun murmuring such complaints.

Regime instability indicators and warnings are blinking. I believe Iran’s revolutionary facade is crumbling, but into an uncertain future.

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As more protesters demand a better future, I am watching for evidence of leniency from their fathers, brothers, uncles, and schoolmates who work in the IRGC, the police, and even in the Basij. If such cracks appear, new non-revolutionary leaders could emerge as quickly as al-Sharaa rose to power in Syria.

Protesters, however, most likely lack experience running cities, provinces, and the federal government. New non-revolutionary leaders therefore probably would look to the U.S. for assurance and support – and right away.

If the protests produce a new Supreme Leader under a revolutionary Velāyat-e Faqih theocracy model, however, the future looks quite dark. Crackdowns would probably be quite harsh and swift, the nuclear program would most likely march on, and Tehran undoubtedly would keep funneling money and arms to trusted proxies that threaten the U.S. and Israel.

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I’ve been working on Iranian issues since 1979 as an academic, diplomat, intelligence officer, and now as a professor of practice. Nothing, in my view, would stabilize the region between the Black Sea, Eastern Mediterranean, and the Persian Gulf faster than a peaceful, non-nuclear and wealthy Iran that recognizes the state of Israel and distances itself from Russia.

Most pendulums eventually swing, and I am watching for this one to swing in support of the Iranian people finally having a chance to rejoin a community of free nations that value peace, prosperity, and democracy. If non-revolutionary leaders were to emerge, the West could finally and quickly work towards restoring a genuinely peaceful future that ends Tehran's nuclear weapons program; breaks its deadly alliance with Russia; terminates its costly support to Hizballah, Hamas, and the Houthis; and welcomes Iran into the community of nations as a responsible, wealth-producing global energy partner. May the pendulum swing decisively in these directions in 2026.

All statements of fact, opinion, or analysis expressed are those of the author and do not reflect the official positions or views of the US Government. Nothing in the contents should be construed as asserting or implying US Government authentication of information or endorsement of the author’s views.

The Cipher Brief is committed to publishing a range of perspectives on national security issues submitted by deeply experienced national security professionals. Opinions expressed are those of the author and do not represent the views or opinions of The Cipher Brief.

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

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EXPERT OPINION — The Iranian people are saying they want new leadership. And it’s not too hard to understand why so many merchants, university students and young people in Iran are on the streets calling for political change and an end to the current Islamic Republic rule.

It was the merchants in Tehran’s Grand Bazar that initially closed their shops because they couldn’t make a living with soaring inflation and the collapse of the national currency, the rial. Merchants in over 32 cities quickly followed suit, with university students and the public joining in protests calling for change.

This is not new for Iran. In 2009, the government ensured that incumbent Mahmood Ahmadinejad was reelected president, despite the popular opposition leader, Mir-Hossein Mousavi, having widespread support from the public, promising hope and change. The government’s heavy hand in ensuring their man was reelected, regardless of what the public wanted and voted for, understandably angered the public, resulting in Iran’s “Green Movement.” Protesters, who adopted green as the symbol of hope and change, claimed the election was rigged. When they demanded greater democracy, the rule of law, and an end to authoritarian practices, the government responded violently. Peaceful protesters were beaten, with thousands arrested and dozens killed.

In September 2022, Jina Mahsa Amini, a 22-year-old Kurdish Iranian was arrested for improperly wearing her head scarf (hijab). She died in police custody, with eyewitnesses saying she was beaten and died because of police brutality. The death of Amini resulted in nationwide protests, with Iran Human Rights reporting that at least 476 people were killed by security forces. Amnesty International reported that the Iranian police and security forces fired into groups with live ammunition and killed protesters by beating them with batons. Amini’s death gave rise to the global movement of: Women, Life, Liberty.

Since then, Iran has conducted a war against its own people, with widespread arrests of anyone protesting widespread government corruption and human rights abuses.

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Today’s protests were sparked by Iran’s severe economic crisis and water shortages, but also by Iran’s humiliating defeat by Israel in its 12-day war of June 2025 and the subsequent U.S. bombing of Iran’s nuclear facilities in Natanz, Fordow, and Isfahan. This was after the people were told that Israel would never dare to attack Iran. But they did, with impunity.

The hundreds of millions of dollars spent on Iran’s nuclear program, building thousands of spinning sophisticated centrifuges, enriching uranium at 60% purity, concealed in deeply buried underground facilities -- and related scientific work— certainly contributed to Iran’s economic collapse. The resultant global sanctions imposed on Iran also contributed to the crumbling of Iran’s economy. Indeed, Iran’s long history of pursuing nuclear weapons and then claiming they ceased such a pursuit, although continuing to enrich uranium while denying IAEA access to suspect nuclear facilities ensured that the global community viewed Iran with deep suspicion and was supportive of the biting sanctions imposed on Iran. Iran’s nuclear pursuits and the resultant sanctions led to Iran’s failed economy. And it was the people who suffered when the rial lost its value.

Iranian President Masoud Pezeshkian acknowledged the legitimacy of the protesters’ complaints, while announcing the appointment of a new central bank chief.

Reportedly, 36 people have been killed during the demonstrations, with hundreds arrested and thousands on the street saying they want change.

Supreme Leader Ayatollah Ali Khamnei, in an address on Saturday, blamed foreign interference and said that “rioters must be put in their place.”

President Donald Trump had warned Iran that if Iran “violently kills peaceful protesters” the U.S. “will come to their rescue.”

What these and previous demonstrations tell us is that the people have suffered enough. They’ve taken to the street because they want change, hope and a leadership that cares for the people. The protesters carry signs saying, “the mullahs must leave Iran.” It’s clear: the government has mismanaged Iran’s economy; has made Iran a pariah nation. The Iranian theocracy, led by supreme leader Ayatollah Ali Khamenei, apparently no longer has the support of the Iranian people.

Is a democratic secular Iran possible?

The author is a former associate director of national intelligence. All statements of fact, opinion or analysis expressed are those of the author and do not reflect the official positions or views of the U.S. government. Nothing in the contents should be construed as asserting or implying U.S. government authentication of information or endorsement of the author’s views.

This column by Cipher Brief Expert Ambassador Joseph DeTrani was first published in The Washington Times

Read more expert-driven national security insights, perspective and analysis in The Cipher Brief

Interview transcript:

Stephen Bacon We’re seeing a lot more protests, particularly at the Government Accountability Office, in the last several months that have been filed using AI — a party that’s not represented by counsel using AI to generate the protest and then file it. But we’re seeing some problems with that in some of the decisions that are coming out of the GAO.

Terry Gerton So tell me more about how companies are using AI. You mentioned that they’re doing this without the help of legal counsel as well.

Stephen Bacon That’s right, at least the ones that we’ve seen so far in public decisions at GAO. It’s not entirely clear how the protesters are using it, but we can imagine that maybe they’re taking the debriefing information that they’re getting from the agency, they’re uploading that into an LLM like ChatGPT or Claude, and using it to develop a protest argument that they can file with the GAO. And what we’re seeing in the decisions is that many of the protests that have been filed using AI contain hallucinations. Case citations that don’t exist to actual cases that have decided by GAO. So the legal precedent that the protesters are relying on, in fact, don’t exist. And that’s one of the inherent limitations of LLMs is that they hallucinate. They come up with decisions, citations that don’t exist. To be clear, we’re not just seeing this by protesters that are not represented by counsel. This is happening in courts all across the country where attorneys are using AI to help generate legal filings and then getting in trouble with the courts when those citations don’t actually exist. Because when you file a protest or any kind of legal filing that has a citation in it, the court is relying on you to make an accurate representation that the legal authority that you’re relying on is in fact correct and is in fact a decision that has been issued in the past. And so both courts and the GAO now are saying that you can get in trouble, you can be sanctioned as a protester if you submit a protest that has some kind of fake citation that’s inaccurate.

Terry Gerton What does that mean to be sanctioned as GAO reviews the case?

Stephen Bacon At GAO, they have inherent authority to sanction protesters, and really the main sanction that they have is to dismiss a protest. If you happen to file a protest that contains fake citations, they reserve the right to dismiss your protest. Even if you have legally valid grounds to protest — maybe you have identified an error in the agency selection process — if GAO determines that you relied on fake citations in your protest, they could dismiss the protest, even if the actual merits of it may have some validity to it.

Terry Gerton So there’s some interesting intersections of situation going on here, I think. There’s a lot of uncertainty on the contractor side about the new FAR regulations and how those are going to be enforced, certainly across different agencies. We’ve had a reduction in the contractor workforce, so there are fewer contractors managing more acquisitions. And now we have AI coming in to sort of simplify, but potentially also make much more complex, the whole protest market. So do you expect all of this to be leading to an increase in protests? And what does that mean for GAO as they’re trying to sort out the validity of all the claims?

Stephen Bacon I think it certainly has the potential to, if what we’re seeing in the decisions is a trend towards more pro se protesters — pro se being parties that are not represented by counsel — using AI. To the extent that that trend continues, I think that there’ll be a lower barrier for protesters to file at GAO if they think that they can use an LLM to generate a protest without having to spend legal fees on outside counsel. Which is understandable, particularly for small businesses who may have resource constraints. If they feel like they can use an LLM to help them challenge an award decision, we may see more of that at GAO. I think what GAO is saying in these opinions that have come out…at first, they’re warning protesters that using LLMs that create fake citations is sanctionable. They didn’t actually take the step of issuing a sanction. But finally, in the last several months, we saw that they did, in fact, take that step of dismissing a protest, actually several protests that were filed by the same company, that contained fake citations. They actually took that step and dismissed those protests on the grounds that they misrepresented legal authority in their filings with the GAO.

Terry Gerton I’m speaking with Stephen Bacon. He’s a partner in the government contracts practice group at Rogers Joseph O’Donnell. You mentioned small businesses and their capacity constraints in terms of they may not have in-house counsel, they may have a lot of folks who can review all of this. But does this have the effect of sort of adding some equality into the protest market where they can use AI to submit? And do you think then that that’s going to change the protest space? Is this just the tip of the iceberg in terms of transformation?

Stephen Bacon It certainly lowers the barrier for companies. The GAO was set up to be a relatively informal forum to allow for the quick and efficient resolution of protests. I don’t think what GAO is saying necessarily is that AI cannot be used. But what they are saying is that we have a process to resolve bid protests and we want to maintain the integrity of that. And if you’re going to use AI, you need to be sure that you verify that what you’re filing is accurate. For anybody that is thinking about using AI to generate a protest, there needs to be some level of quality-checking of what is in the draft that’s generated by an LLM to be sure that you’re making accurate representations to the GAO in your protest. So that means checking the legal citations to make sure that the cases actually exist. That basic level of quality-checking needs to happen. Otherwise, GAO could just be flooded with protests that have no merit and that have lots of inaccuracies in them. And that’s not going to help them resolve protests in a way that’s efficient and achieves their ultimate goal.

Terry Gerton So where do you think we go from here, and what’s your guidance to the companies who are considering using AI to file their protests?

Stephen Bacon For any company that’s contemplating using an AI to generate protests, the basic point: If you’re going to do it, you have to verify that the citations are accurate. You have verify that what an LLM is generating is citing to a decision that has been published by GAO in the past. And that’s relatively easy to do. GAO has all of their decisions on their website, and you can go and check those and verify not only that the citations are accurate, but the legal proposition that you’re asserting is supported by the case that’s being cited. That’s important, too. That’s kind of table stakes. But the other thing I would say is that what we’re seeing in a lot of these decisions, where it’s obvious from the decision that AI has been used and that GAO is pointing out that there are these fake citations, is that oftentimes those protests are being dismissed for procedural defects as well. So things like timeliness and bid protest standing. Those kinds of procedural issues are being missed by the protesters who are using LLMs to generate the filings. And that’s because of another inherent limitation of an LLM; it often will tell you what you want it to say in a lot of ways. So if you tell the LLM, generate me a protest on this issue or that issue, it will do that and it might produce something that looks, on its face, credible and compelling. But if you don’t have the domain knowledge of the timeliness rules and the standing rules, you’re often going to overlook those things and the LLM is not going to catch it for you. And so you may be in a situation where you file something that looks on its face credible, but is in fact an untimely protest.

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