The covert war between Israel and Iran has spread to the Crypto Assets sector

Recently, Iran's largest crypto assets exchange Nobitex suffered a serious cyber attack. A hacker group claiming to be "Sparrow Hunter" infiltrated Nobitex's systems and stole approximately $90 million in assets. The group claims that Nobitex assisted the Iranian government in evading international sanctions and funding illegal activities, and that the stolen funds were transferred into accounts linked to anti-Iran messages.

This shocking incident not only exposed Iran's vast Crypto Assets market but also made people realize that this country, which practices Islamic theocracy, has deeply engaged in the Crypto Assets industry.

The Motivations Behind Iran's Development of the Crypto Assets Market

Iran's interest in Crypto Assets primarily stems from economic and geopolitical pressures. Facing severe international sanctions, Iran's conventional financial channels are restricted, and international trade and money transfers are hindered. In this context, Crypto Assets are seen as an alternative means.

The economic situation in the country has also driven the development of the crypto market. Iran has long faced high inflation and pressure from currency devaluation, with its currency, the rial, continuously weakening. The stock market has been highly volatile, prompting many to invest their funds in Crypto Assets to hedge against risks. For ordinary Iranians, Crypto Assets are seen as a tool for preserving value and diversifying assets, especially during times of economic turbulence.

According to an analysis report by a blockchain security company, the total amount of Crypto Assets flowing into major exchanges in Iran in 2022 was nearly $3 billion, with Nobitex accounting for about 87% of the market share. These local exchanges are required to operate under the permission of regulatory authorities and comply with regulations such as anti-money laundering and customer identification.

In terms of the development of blockchain technology, the Iranian government has also made some arrangements in recent years. Two well-known official-supported blockchain projects are Kuknos and Borna. The Kuknos network was jointly launched by four major banks in Iran, and its native coin is used for internal settlements within the banking system. The Borna platform is developed in collaboration between the Central Bank of Iran and a technology company, providing a blockchain-supported application framework for financial institutions.

In addition, Iran and Russia are reportedly planning to launch a gold-backed cross-border stablecoin for trade settlement between the two countries and to evade financial sanctions. The Central Bank of Iran is also studying the launch of its own central bank digital currency "encryption rial".

Thanks to its abundant energy resources, Iran recognized the cryptocurrency mining industry as a legal sector in 2018. In 2021, Iran accounted for about 4.5% of the global Bitcoin hash rate, producing nearly $1 billion worth of Bitcoin annually for import trade and to mitigate the impact of sanctions. The government implements preferential electricity pricing policies for cryptocurrency mining farms.

However, due to the burden on the power grid caused by high energy subsidies and regulatory requirements, many mines choose to operate underground or circumvent regulations. It is estimated that by 2024, Iran's share of global Bitcoin mining power will have dropped to about 3.1%.

The Evolution of Iran's Crypto Assets Policy

The Iranian government's attitude towards Crypto Assets has undergone multiple changes, showing a general trend from early openness to gradual tightening.

Since 2018, Iran has officially recognized cryptocurrency mining as a legal industry. The government requires licensed miners to use efficient equipment and sell the mining proceeds to the central bank at regulated prices, while paying for electricity at export rates. The low electricity prices have attracted overseas miners to invest in mining in Iran.

However, this "energy exchange for coin" model quickly exacerbated the power shortage. In May 2021, after experiencing a rare summer blackout, the government implemented a temporary four-month ban on all Crypto Assets mining activities. Since then, during the peak summer electricity consumption, the government has periodically shut down some mining sites to ensure the supply of electricity for civilian use.

In terms of trading regulation, the Central Bank of Iran prohibited individuals from using foreign mined digital currencies for transactions within the country as early as 2020. After 2022, regulatory authorities intensified restrictions on Crypto Assets advertising and mining machine sales. In December 2024, an official order was issued to prohibit the promotion of Crypto Assets mining machines and related training courses on the internet, and to require major e-commerce platforms to remove related advertising content.

As we approach the end of 2024, regulatory focus shifts to the encryption transactions themselves. The Central Bank of Iran has introduced new regulations in an attempt to block exchange transactions between crypto assets and rials on domestic websites. In January 2025, the government will also launch a designated trading interface, requiring all domestic exchanges to connect to the regulatory system through this channel, facilitating the monitoring of user identity information and the flow of funds.

In February 2025, the Iranian government officially announced a ban on publishing Crypto Assets advertisements on any occasions and platforms. After the Nobitex hacking incident in June, the Central Bank of Iran further tightened its control over Crypto trading: it stipulated that domestic Crypto platforms are only allowed to operate between 10 AM and 8 PM daily to improve regulatory efficiency and limit capital outflow.

![The crypto market has become a new battleground for the shadowy battles of Iran, under the theocratic regime's dark influence](https://img-cdn.gateio.im/webp-social/moments-59cfcabc923709cec00bca0667354075.webp01

Crypto Assets and Islamic Doctrine

As an Islamic Republic, Iran must also consider the norms of Islamic law when promoting the development of Crypto Assets. Islamic teachings strictly prohibit usury and gambling, and the trading of Crypto Assets has been questioned by some conservatives due to its volatility and speculative nature.

Iran's Supreme Leader Khamenei holds a relatively open attitude towards this. In 2021, he stated that the buying, selling, and production of Crypto Assets "must comply with the laws and regulations of the Islamic Republic of Iran" and are not automatically considered to be in conflict with Islamic teachings. He also called on the religious community to provide opinions on new social issues, including Crypto Assets, to keep the Sharia aligned with contemporary times.

However, the opinions of different religious scholars are not entirely consistent. Some prominent Shia scholars take a cautious stance, believing that cryptocurrencies like Bitcoin have "many uncertainties" and therefore their transactions do not comply with the requirements of Islamic law. Other religious leaders urge believers to adhere to more authoritative interpretations of the law in cases of legal ambiguity.

Although the Iranian authorities do not explicitly regard Crypto Assets as a religious taboo, they emphasize that operations must be conducted within the framework of national laws and regulations to avoid excessive speculative behavior. This position somewhat balances the contradictions between Islamic doctrine and modern economic practices.

Under multiple economic uncertainties, Crypto Assets continue to attract the attention of a large number of young people and technology professionals in Iran. With the development of information technology, the popularity of smartphones, and the gradual opening of Iran's communication with the outside world, the threshold for ordinary people to participate in digital currency trading is lowering.

However, participating in the Crypto Assets market also comes with risks. The low level of encryption knowledge in Iran has set traps for criminals: scam cases are rampant, and many investors suffer huge losses due to blindly following trends. Anonymous transactions on the black market also pose challenges for regulation. Coupled with severe market volatility and a lack of mature legal protections, some Iranian families hold a cautious attitude towards such assets.

Overall, although Crypto Assets are gradually being more widely accepted in Iran, discussions surrounding their legality, security, and morality continue. Nowadays, against the backdrop of the Iranian government significantly restricting internet access and even experiencing network outages in several regions, for the general public, the development prospects of the crypto market may no longer be the focus of attention compared to the real dilemmas of war and national survival.

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