Iran’s cryptocurrency ecosystem exploded to $7.78 billion in transaction volume during 2025, reflecting extraordinary surge in Bitcoin [finance:Bitcoin] and digital asset usage driven by simultaneous crises: mass political protests, economic collapse manifesting in near-total Iranian rial depreciation, and unprecedented internet restrictions imposed by authorities attempting to suppress dissent. On-chain analysis from Chainalysis reveals that Bitcoin withdrawals from Iranian exchanges to personal wallets surged dramatically during the December 28, 2025-January 8, 2026 protest period when nationwide internet blackouts began, demonstrating how Iranians increasingly turn to cryptocurrency as financial escape mechanism during periods of governmental instability and capital controls.
Simultaneously, the Islamic Revolutionary Guard Corps (IRGC)—Iran’s most powerful military and economic institution—has emerged as dominant actor within the cryptocurrency ecosystem, with IRGC-linked addresses receiving over $3 billion during 2025 and representing approximately 50% of all crypto activity in Q4. This dual dynamic reveals Bitcoin’s paradoxical role in Iran: ordinary citizens learning how to get bitcoins as financial refuge from collapsing national currency and governmental oppression, while the regime itself utilizes identical cryptocurrency infrastructure to fund proxy networks, circumvent international sanctions, and finance activities explicitly designated as terrorism support by Western governments.
The Collapse of Iran’s Monetary System: Economic Context for Bitcoin Adoption
Understanding Iran’s Bitcoin surge requires comprehending the extraordinary economic circumstances driving citizens toward cryptocurrency. The Iranian rial has depreciated approximately 90% since 2018, obliterating purchasing power for ordinary citizens and rendering savings denominated in national currency effectively worthless. Inflation rates now range between 40-50% annually, meaning individuals holding rials lose roughly half their purchasing power yearly through monetary erosion alone.
Traditional financial system responses—moving savings into bank accounts, bonds, or government securities—prove ineffective when the currency itself is collapsing. Iranian banks offer interest rates insufficient to compensate for inflation, rendering deposits economically destructive. For citizens concerned about preserving remaining wealth, traditional domestic financial assets provide no protection against rial depreciation.
Bitcoin offers fundamentally different properties. As fixed-supply asset trading globally in US dollars or other stable currencies, Bitcoin prices remain independent of Iranian monetary policy failures. When the rial collapses, Bitcoin’s dollar-denominated price appreciation accelerates against the depreciating local currency, effectively transforming Bitcoin holdings into store of value protecting purchasing power.
Additionally, Bitcoin’s self-custodial nature—where individuals control private keys without relying on banks or financial institutions—proves invaluable when governmental capital controls restrict traditional financial access. As the Iranian government has increasingly implemented withdrawal restrictions, currency controls, and sanctions on international transactions, Bitcoin’s peer-to-peer transferability offers pathway to move wealth outside government-controlled financial systems.
December Protests: Bitcoin as Civil Disobedience Infrastructure
The mass protests erupting in late December 2025 following years of accumulated grievances and economic deterioration provided dramatic demonstration of Bitcoin’s functionality during political instability. When demonstrations began approximately December 28 and authorities responded with nationwide internet blackouts January 1-8, on-chain Bitcoin transaction patterns shifted dramatically.
Chainalysis compared on-chain behavior in two distinct periods: November 1 to December 27 (pre-protest) versus December 28 to January 8 (protest period with internet blackouts). The comparison revealed “substantial increases in both the average daily dollar amount transacted and the number of daily transfers to personal wallets,” with particularly notable surge in withdrawals from Iranian cryptocurrency exchanges to unattributed personal wallets.
These withdrawal patterns carry significant meaning beyond simple trading activity. When Iranians withdraw Bitcoin from exchanges during periods of governmental instability, they’re executing rational financial decision-making: moving cryptocurrency from exchange custody—where authorities could theoretically pressure platforms to freeze accounts—into personal self-custodial wallets immune to governmental seizure without access to private keys.
The timing of this behavior coincided with internet blackouts, further validating the interpretation that Iranians viewed Bitcoin as critical asset requiring offline storage precisely during periods when online platforms faced governmental pressure. Bitcoin’s design enables continued ownership and transaction capability even when internet access is restricted, though transactions obviously require eventual connectivity. The psychological imperative to get bitcoins into personal custody during governmental instability reflects understanding that self-custody provides protection.
The IRGC’s Crypto Dominance: Sanctions Evasion on Massive Scale
While ordinary Iranians deployed Bitcoin for personal wealth preservation and protection against governmental instability, the IRGC utilized identical cryptocurrency infrastructure for fundamentally different purpose: systematic international sanctions evasion and financing of designated terrorist entities. The IRGC’s crypto activity paints portrait of sophisticated state-aligned actor constructing persistent financial infrastructure to bypass international economic restrictions.
The reported figures alone are staggering: IRGC-linked wallet addresses received $2 billion in cryptocurrency during 2024 and escalated to over $3 billion during 2025—representing dramatic increase in regime’s reliance on digital assets for illicit financial operations. By Q4 2025, IRGC-associated addresses accounted for more than 50% of all cryptocurrency value flows within Iran’s ecosystem, demonstrating the military organization’s complete dominance over the national crypto economy.
However, these official figures represent probable underestimation. Chainalysis explicitly noted that the $3 billion calculation includes “only a limited number of addresses from sanctions designations of IRGC wallets,” excluding shell companies, unidentified facilitators, and sophisticated laundering infrastructure intentionally obscured from analysis. Treasury and Israeli designations continue expanding as additional IRGC infrastructure is identified, suggesting actual IRGC-linked crypto activity exceeds reported figures substantially.
UK Crypto Exchanges and the $1 Billion Laundering Network
Beyond Iran’s direct cryptocurrency ecosystem, investigators uncovered sophisticated IRGC operation exploiting regulatory gaps in United Kingdom cryptocurrency markets. Two UK-registered exchanges—Zedcex and Zedxion—operated as single unified entity despite presenting separate public identities, functioning as dedicated IRGC financial infrastructure.
Between 2023 and 2025, these exchanges processed approximately $1 billion in IRGC-linked transactions, with IRGC activity representing 56% of total volume. The operational sophistication demonstrates this wasn’t opportunistic misuse but rather “sanctioned military organization operating exchange-branded infrastructure offshore,” in the assessment of TRM Labs researchers.
The exchanges employed advanced laundering techniques. Transactions predominantly utilized Tether (USDT) stablecoin on the Tron blockchain, chosen specifically for low transaction costs and high liquidity enabling rapid funds transfers with minimal scrutiny. The exchanges integrated with major Iranian platforms including Nobitex and Wallex, creating comprehensive financial ecosystem enabling sanctioned military funds to flow through international crypto markets.
Critically, both exchanges publicly claimed anti-money-laundering compliance. Zedcex even listed Iran among prohibited jurisdictions, creating façade of regulatory adherence despite facilitating over $600 million in IRGC transactions. The gap between paper compliance and operational reality enabled years of sanctions evasion through corporate structures possessing dormant status and nominal directors while processing billions in on-chain activity.
Mapped Transaction Flows: Tracing IRGC’s Financial Architecture
TRM Labs investigators mapped IRGC transaction flows through methodical analysis, depositing and withdrawing small cryptocurrency amounts across multiple wallets to reconstruct internal exchange infrastructure. The investigation traced 187 wallet addresses designated by Israeli authorities as IRGC-controlled, following their connections to intermediaries operating beyond Iran’s borders.
One identified transaction exemplified the sophistication of IRGC’s sanctions evasion. A $10 million payment moved from IRGC-controlled addresses to wallets linked to a Yemeni national previously sanctioned by US Treasury for fuel smuggling financing Houthi militia operations. These cross-border transactions demonstrate IRGC’s integration with proxy networks across Middle East—funding Hezbollah operations in Lebanon, Houthi activities in Yemen, and militia operations in Syria.
Additional investigations linked the exchanges to Babak Zanjani, prominent Iranian businessman previously convicted of embezzlement and sanctions evasion during Iran’s oil-for-trade schemes designed to circumvent earlier sanction regimes. Zanjani’s re-emergence in crypto infrastructure suggests institutional knowledge—the regime recycling individuals experienced in sanctions evasion toward cryptocurrency-based financial operations.
The Dual-Use Paradox: Freedom and Oppression Through Identical Technology
Iran’s cryptocurrency ecosystem illustrates fundamental paradox of decentralized digital assets: identical technology simultaneously enables individuals to escape governmental oppression and enables oppressive governments to escape international constraints. The same blockchain infrastructure that allows ordinary Iranians to get bitcoins as financial refuge also enables IRGC to finance terrorism and proxy warfare.
This creates regulatory and policy complexity without clean solutions. If governments restrict cryptocurrency to prevent sanctions evasion, they simultaneously restrict Iranian citizens’ ability to preserve wealth and escape governmental monetary policy failures. If governments permit unrestricted cryptocurrency, they enable both individual financial freedom and regime sanctions evasion.
Human rights advocates argue that Bitcoin’s role enabling Iranians to resist governmental financial control justifies accepting the reality that the same technology enables regime sanctions evasion. Alex Gladstein of the Human Rights Foundation refers to Bitcoin as “Trojan horse for freedom,” emphasizing that Bitcoin’s primary benefit—resistance to governmental control—carries unavoidable cost of also resisting governmental sanctions coordination.
Conversely, governments and sanctions regimes argue that permitting cryptocurrency without restrictions undermines effectiveness of sanctions targeting hostile regimes. If sanctions are genuinely necessary to constrain malevolent governmental behavior, allowing digital assets to circumvent those sanctions defeats their purpose.
Pattern Recognition: Bitcoin During Crises Globally
Iran’s experience reflects broader global pattern where cryptocurrency adoption accelerates during periods of currency collapse, governmental instability, and capital controls. Ukraine witnessed dramatic Bitcoin adoption when Russian invasion threatened financial system stability. Venezuela, suffering hyperinflation obliterating currency value, saw population turn to Bitcoin and other cryptocurrencies as functional money.
In each crisis, Bitcoin serves similar functions: store of value immune to governmental monetary policy, censorship-resistant transfer mechanism bypassing capital controls, and optionality for individuals potentially needing to flee. The recurring pattern across diverse nations experiencing currency collapse or governmental breakdown suggests that Bitcoin’s utility during crises reflects genuine economic demand rather than speculative behavior.
Behavioral Indicators: Exchange Withdrawals as Resistance Signals
The surge in Bitcoin withdrawals from Iranian exchanges during protests represents behavior pattern observed repeatedly during crisis periods. Withdrawal spikes indicate intention to self-custody—remove coins from platform custody to personal wallets controlled exclusively by owners. This behavior increased during internet blackouts when platforms faced governmental pressure and unavailability.
Chainalysis emphasized: “Most telling is the surge in withdrawals from Iranian exchanges to unattributed personal Bitcoin (BTC) wallets. This surge suggests Iranians are taking possession of Bitcoin at a markedly higher rate during protests than they were beforehand.” This behavioral shift reflects understanding that self-custody provides protection unavailable through platform holdings.
For individuals seeking to get bitcoins during governmental instability, the tactical implication is clear: exchange platforms remain useful for acquisition but present counterparty risks when governmental pressure increases. Moving acquired Bitcoin to personal self-custodial wallets following purchase provides protection against forced platform shutdowns or governmental seizure attempts.
Regulatory Challenges and Enforcement Complexity
The Iran case illustrates fundamental challenges governments face in sanctioning cryptocurrency activity. Unlike traditional banking, where regulators can mandate financial institutions implement controls, cryptocurrency operates through decentralized networks that no single entity controls. UK-registered exchanges ostensibly complying with anti-money-laundering standards nonetheless facilitated over $600 million in IRGC transactions.
Investigators had to conduct months of detailed analysis tracing wallet clusters and transaction flows to identify connections between seemingly unrelated exchanges. Ordinary regulatory enforcement mechanisms—requesting compliance documentation, issuing guidance—proved insufficient against determined actors using sophisticated technical methods. The decentralized nature of cryptocurrency makes centralized control mechanisms ineffective.
The Financial Times reported that Iran increasingly explores cryptocurrency payments for arms transactions, creating security implications beyond traditional sanctions concerns. As cryptocurrency becomes integrated into weapons procurement pathways, national security considerations drive enforcement intensity beyond typical sanctions objectives.
What Happens Next: Escalating Pressure and Adaptive Strategies
Treasury and Israeli designations of IRGC wallet addresses will likely continue expanding as investigators map additional infrastructure. However, sophisticated actors learn from exposure. The IRGC and associated entities will almost certainly deploy more advanced obfuscation techniques—employing privacy coins where feasible, utilizing multiple transaction layers across different platforms, and deploying AI-resistant mixing protocols designed to frustrate chain analysis.
Meanwhile, ordinary Iranians will likely continue expanding Bitcoin adoption as currency collapse accelerates. The 90% rial depreciation since 2018 continues deteriorating, with further devaluation probable. As financial system reliability declines, cryptocurrency serves increasingly critical functions as store of value and value transfer mechanism.
Authorities face dilemma: restricting cryptocurrency access to prevent IRGC sanctions evasion simultaneously restricts ordinary citizens’ ability to preserve wealth and escape monetary collapse. Permitting cryptocurrency enables both financial freedom and regime sanctions evasion. This tension will likely define Iranian cryptocurrency policy for coming years.
For Global Bitcoin Participants: Understanding Iran as Bellwether
For those observing global cryptocurrency markets and seeking to understand Bitcoin’s long-term trajectory, Iran represents valuable case study of Bitcoin functioning as genuine monetary alternative during systemic breakdown. The $7.78 billion annual transaction volume in nation of 88 million people exceeds adoption rates in many developed nations—despite governmental restrictions and regulatory hostility.
This demonstrates that when governmental monetary systems fail, demand for Bitcoin emerges organically and spontaneously. Policy preferences or regulatory restrictions cannot fully suppress demand when alternative asset provides genuine value. Iran’s example suggests that Bitcoin adoption may follow pattern where crises drive organic demand rather than smooth regulatory acceptance.
For individuals learning how to get bitcoins, Iran’s experience demonstrates that acquisition channels persist even under governmental hostility. Exchange platforms continue operating despite governmental threats; peer-to-peer transaction networks enable transfers without institutional intermediation; mining operations generate new Bitcoin supply. Cryptocurrency networks exhibit resilience to governmental suppression attempts that would devastate traditional financial institutions.
The convergence of crisis-driven demand, governmental repression, and international sanctions creates powerful dynamics driving cryptocurrency adoption. Iran’s 2025-2026 experience will likely prove prescient regarding broader patterns as other nations experience currency collapse or geopolitical instability. Bitcoin’s role in Iran will likely expand regardless of policy responses, as economic incentives and political considerations force millions toward digital assets.
