Cryptocurrency outflows from Iranian exchanges surged 70% to $4.2 billion in 2024, as citizens sought alternatives amid economic instability and geopolitical tensions.
Crypto as a Financial Lifeline
Iranian citizens increasingly turned to cryptocurrency in 2024 as economic conditions worsened and financial restrictions tightened. According to a new report from blockchain analytics firm Chainalysis, Iranian exchange outflows rose to $4.2 billion—a 70% increase from the previous year.
Sanctions, currency devaluation, and lack of access to global banking services have pushed individuals and businesses toward crypto. Bitcoin, in particular, has become an attractive store of value due to its censorship resistance and self-custodial nature.
Government Crackdowns and Capital Flight
Iran’s government has taken aggressive measures to curb capital flight, including freezing withdrawals from crypto exchanges in December 2024 amid a historic drop in the Iranian rial’s value. Inflation remains between 40-50%, and declining trust in the government has fueled crypto adoption.
Chainalysis noted that Iranian crypto users are primarily seeking to move funds out of the country rather than engage in illicit financial activity. Despite global compliance efforts reducing Iranian exposure to foreign exchanges by 23% between 2022 and 2024, domestic demand for crypto remains high.
Tornado Cash and Sanctioned Transactions
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) intensified efforts to disrupt crypto transactions linked to sanctioned jurisdictions in 2024. Iran, Russia, and other restricted entities received $15.8 billion in cryptocurrency last year—accounting for 39% of all illicit crypto flows.
Despite sanctions and legal actions, privacy-focused services like Tornado Cash have remained resilient. The platform saw a 108% increase in transaction volume in 2024, largely fueled by illicit fund transfers.
Although Tornado Cash was sanctioned in 2022, a U.S. federal appeals court ruled in late 2024 that OFAC had exceeded its authority in sanctioning its smart contracts. The sanctions were later reversed by a U.S. District Court in January 2025, raising questions about enforcement limits in decentralized finance.
