A report by Chainalysis reveals a 70% increase in outflows from Iranian exchanges, reaching $4.2 billion.
Amid rising geopolitical tensions and economic instability, Iranians have increasingly turned to cryptocurrencies as a means of protecting their capital over the past year. According to the latest Chainalysis report, outflows from Iranian exchanges surged to $4.2 billion in 2024, marking a 70% increase compared to the previous year.
The rise in cryptocurrency usage coincides with a period of severe instability in Iran’s economy, characterized by a sharp devaluation of the local currency and an inflation rate fluctuating between 40% and 50%. Limited access to the global banking system due to international sanctions has driven both citizens and businesses toward alternative financial channels.
Bitcoin has emerged as the preferred asset in this scenario, thanks to its censorship resistance and the ability to self-custody funds. Chainalysis highlights that spikes in crypto exchange activity align with significant geopolitical events, such as Iranian missile launches, and a growing distrust toward government institutions.
Iranian authorities have attempted to curb this capital flight with measures like freezing withdrawals from domestic exchanges in December 2024, following the collapse of the Iranian rial. Meanwhile, global compliance efforts have led to a 23% reduction in foreign exchanges’ exposure to Iranian customers between 2022 and 2024.
On an international scale, Chainalysis reports that sanctioned jurisdictions collectively received $15.8 billion in cryptocurrencies in 2024, accounting for 39% of all illicit crypto transactions. Iran, alongside Russia, has sought to bypass Western sanctions through partnerships with BRICS nations and stablecoin-based payment systems, while the U.S. Office of Foreign Assets Control (OFAC) has intensified efforts to crack down on such transactions.
Chainalysis concludes the report stating:
“The increase in the use of Iranian exchanges suggests that a growing number of individuals and institutions are turning to cryptocurrencies to safeguard their savings and bypass financial restrictions.”
