Bitcoin Magazine

Bitcoin Adoption Surges in Iran Amid Protests and Rial Collapse

A new report from blockchain analytics firm Chainalysis shows that Iran’s crypto ecosystem boomed in 2025, with Bitcoin playing a growing central role for both ordinary citizens seeking financial refuge and the Islamic Revolutionary Guard Corps (IRGC), which now dominates much of the country’s on-chain activity.

According to the report, Iran’s crypto economy processed more than $7.78 billion in value in 2025, growing faster for most of the year than in 2024. 

The report found that crypto activity in Iran is closely correlated with major political shocks, regional conflict, and domestic unrest, making blockchain data a real-time barometer of instability inside the country.

Bitcoin as a flight to safety

One of the clearest trends identified in the report is a surge in Bitcoin withdrawals to personal wallets during mass protests in late 2025 and early 2026. Comparing activity before protests began with the period leading up to Iran’s nationwide internet blackout on January 8, Chainalysis observed sharp increases in both transaction volumes and transfers from Iranian exchanges to self-custodied Bitcoin wallets.

The behavior suggests Iranians are using Bitcoin as a flight to safety amid accelerating currency collapse and political uncertainty. 

The Iranian rial has lost roughly 90% of its value since 2018, with inflation running between 40% and 50%. In that environment, Bitcoin’s censorship resistance and portability offer a rare form of financial optionality — especially during protests, capital controls, or the risk of needing to flee the country.

Chainalysis notes that this pattern mirrors Bitcoin adoption during crises elsewhere, where citizens turn to self-custody when trust in state-controlled financial systems breaks down.

The report shows pronounced spikes in Iranian crypto activity following major geopolitical and domestic events, including, the January 2024 Kerman bombings, which killed nearly 100 people at a memorial for IRGC-Quds Force commander Qasem Soleimani.

The report also marked a spike in activity after Iran’s October 2024 missile strikes against Israel, following the assassinations of Hamas and Hezbollah leaders and during the 12-day war in June 2025, which included the U.S.-Israeli strikes on Iranian military infrastructure, cyberattacks on Iran’s largest crypto exchange Nobitex, and disruptions at Bank Sepah, a key IRGC-linked financial institution.

IRGC is dominating Iran’s crypto economy

While Bitcoin has become a lifeline for many civilians, Chainalysis warns that Iran’s crypto ecosystem is increasingly dominated by the IRGC. Addresses linked to IRGC-affiliated networks accounted for around 50% of all crypto value received in Iran in Q4 2025, a share that has steadily grown over time.

IRGC-linked wallets received more than $3 billion on-chain in 2025, up from over $2 billion in 2024. 

Chainalysis said this figure is a lower-bound estimate, based only on wallets publicly identified through sanctions designations by the U.S. Treasury’s OFAC and Israel’s National Bureau for Counter Terror Financing. 

The true scale is likely larger, given the use of shell companies, facilitators, and undisclosed wallets.

These networks span multiple countries and are used to move illicit oil revenues, launder funds, evade sanctions, and finance Iran’s regional proxy groups.

Iran's currency has collapsed and is now officially worth $0.

Iran needs Bitcoin pic.twitter.com/s5GxaXupbt

— Bitcoin Magazine (@BitcoinMagazine) January 12, 2026

Bitcoin, sanctions, and resistance

Chainalysis concluded in their report that crypto, particularly Bitcoin, is playing somewhat of a dual role in Iran: its a financial escape valve for citizens and a sanctions-evasion tool for the state and its security apparatus. 

As Iran faces mounting internal dissent, economic dysfunction, and external pressure, on-chain data shows Bitcoin increasingly being used outside government control, especially during moments of crisis.

These findings underscore how Bitcoin’s permissionless design cuts both ways — serving as a lifeline for civilians facing political instability while also enabling state and paramilitary actors, reinforcing the case that Bitcoin itself is neutral infrastructure for a couple different actors.

This post Bitcoin Adoption Surges in Iran Amid Protests and Rial Collapse first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

• Chainalysis recorded $154 billion in illicit inflows, driven largely by sanctioned entities.
• Russia’s ruble-backed A7A5 token processed over $93.3 billion in transactions within a year.
• Illicit transactions remain under 1% of total on-chain activity despite rapid growth.

Illicit cryptocurrency activity expanded rapidly in 2025, not because of a sudden spike in everyday crypto crime, but due to a structural shift in how sanctioned states and entities are moving money.

As global financial restrictions widened, blockchain networks increasingly became an alternative channel for cross-border transfers that are harder to block or monitor through traditional systems.

A new report from Chainalysis shows that this change is altering the shape, scale, and participants of the illicit crypto ecosystem.

Illicit crypto addresses received at least $154 billion during 2025, a 162% jump from $59 billion in 2024.

Chainalysis attributed much of this growth to sanctioned actors moving funds on-chain at scale.

While illicit activity still represents less than 1% of total crypto transactions, its rapid expansion highlights how sanctions policy is influencing blockchain usage in ways not seen in previous years.

Sanctions push activity on-chain

Chainalysis described 2025 as a turning point, marked by unprecedented volumes linked to nation-state behaviour.

Unlike earlier phases dominated by hacks, scams, and darknet markets, recent activity has shown higher levels of coordination and technical sophistication.

This reflects growing familiarity with blockchain tools among sanctioned entities facing restricted access to the global banking system.

The scale of sanctions worldwide has risen sharply.

The Global Sanctions Inflation Index estimated in May that nearly 80,000 individuals and entities are currently under sanctions.

Separate research from the Center for a New American Security found that the United States added 3,135 entities to its Specially Designated Nationals and Blocked Persons List in 2024, the highest annual total ever recorded.

This expanding sanctions environment has increased incentives to seek alternative settlement systems.

Russia’s growing role

One of the most prominent contributors to the rise in illicit crypto flows was Russia, which has faced extensive international sanctions since it invaded Ukraine.

In February 2025, Russia launched a ruble-backed digital token known as A7A5.

According to Chainalysis, the token processed more than $93.3 billion in transactions in less than a year.

The use of a state-linked token illustrates how sanctioned governments are experimenting with blockchain-based instruments to maintain trade and financial connectivity.

This approach differs from earlier crypto usage patterns, where states were largely indirect beneficiaries of illicit networks rather than active participants in token-based systems.

Stablecoins take centre stage

Stablecoins played a dominant role in illicit crypto activity throughout 2025, accounting for 84% of total illegal transaction volume.

Chainalysis linked this to their price stability, high liquidity, and ease of cross-border transfer.

These same characteristics that support legitimate payments and remittances have also made stablecoins attractive to sanctioned users seeking predictable settlement.

The growing reliance on stablecoins signals a shift away from volatile assets for illicit transfers.

Rather than speculative trading, the focus has moved toward efficiency, reliability, and scale, particularly for large-value transactions involving sanctioned entities.

Crime remains a smaller share

Despite record illicit volumes, Chainalysis stressed that criminal activity still accounts for a small fraction of the broader crypto economy.

Overall, on-chain activity expanded significantly during the year, keeping illicit transactions below 1% of total volume, even as their absolute value surged.

Other forms of crypto-related crime persisted alongside sanctions-driven flows.

Blockchain security firm PeckShield documented over 20 major exploits in December, including address-poisoning scams and private-key leaks that led to losses of tens of millions of dollars.

The post How global sanctions are reshaping illicit crypto activity appeared first on CoinJournal.