Iran Crypto Outflows Rose 700% After US-Israel Attack

Iran’s top crypto exchange saw a significant spike in crypto withdrawals within minutes of the US and Israel launching strikes in Tehran on Saturday. However, a widespread internet outage curbed additional outflows.

In a post on Monday, Elliptic said crypto outflows from the Nobitex exchange surged by more than 700% to over $500,000 within minutes of the first airstrikes, with a chart showing that outflows reached nearly $3 million in a single hour later that day. 

Elliptic said the sharp rise in outflows “potentially represents capital flight from Iran,” with its initial tracing showing that many of those funds were sent to foreign crypto exchanges.

“This allows funds to be moved out of Iran while avoiding some of the scrutiny of the global banking system,” Elliptic said.

However, crypto outflows from Nobitex fell sharply after Saturday, which fellow crypto forensics platform TRM Labs attributed to the Iranian regime enforcing strict internet blackouts.

Iran’s internet connectivity reportedly fell by approximately 99% shortly after the conflict unfolded, TRM noted.

TRM also opposed Elliptic’s conclusion that capital flight is leaving Iran, stating:

“It appears that the country’s crypto ecosystem is not showing signs of acceleration or capital flight, but instead experiencing a downturn in both transactions and volume as the regime enforces strict internet blackouts.”

The crypto outflows come as the US and Israel seek to topple the current Iranian regime and wipe out its nuclear and missile programs. Iran responded with airstrikes of its own on neighboring countries, creating further instability in the region.