Iranian government asks crypto exchanges to limit operating hours

Iranian government asks crypto exchanges to limit operating hours

After Iranian’s largest cryptocurrency platform, Nobitex, was exploited, resulting in the loss of more than $90 million in assets spanning a range of cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, Ripple, Solana, Tron, and Ton, in the aftermath, the Iranian government has since then asked crypto exchanges to limit their operational hours from 10 am to 8 pm.

The exploitation was carried out by a pro-Israel group known as Gonjeshke Darande framing the attack as a politically motivated strike against Iranian digital infrastructure. Notably, Chainalysis analysis indicates that this is the case, the attacker-controlled wallets were burner addresses lacking private key access, suggesting that the theft of more than $90 million was likely politically motivated, rather than financial in nature. While this is the first hack of this scale exclusively for geopolitical purposes, this is not the first time there’s been increased activity during windows of high geopolitical tensions between Israel and Iran, as noted in our 2024 Crypto Crime Report.

Israel is attacking the financial infrastructure of Iran, both with ATMs and crypto exchanges. Because of the sanctions, crypto exchanges like Nobitex have become the access platform for Iranians who want to access global crypto markets. Nobitex’s total inflows are well over $11 billion, compared to just under $7.5 billion for the next ten largest Iranian exchanges combined.

In the immediate aftermath of the exploit, Nobitex issued a public statement, assuring users that their funds were safe. While on-chain analysis confirms that the attacker burned the stolen funds, making them irretrievable, Nobitex has taken additional steps to reinforce user trust. Notably, the exchange has moved large quantities of Bitcoin to what appear to be newly established cold storage wallets, an effort likely aimed at bolstering its security posture and reducing exposure to similar future attacks.

Beyond Nobitex itself, the incident appears to have triggered a wider response from the Iranian regime. According to reports, the Central Bank of Iran has directed all domestic crypto exchanges to limit their operating hours to between 10 AM and 8 PM.

Central Bank of Iran announces regulation for crypto exchanges and custodians

Central Bank of Iran announces regulation for crypto exchanges and custodians

Iran’s Minister of Economic Affairs and Finance Abdolnaser Hemmati has announced at an event on digital currencies in Tehran that the government intends to regulate digital currencies and cryptocurrencies instead of putting limitations on them, as the Central Bank of Iran announced the regulation of crypto exchanges and crypto custodians under its new crypto framework.

Hemmati said that Iran is moving towards regulating and eliminating the adverse effects of digital currency on the economy and instead using its positive effects. He cited the advantages and progress of digital currency as the reasons behind the decision.

While Hemmati noted that digital money, including digital currencies is within the scope of the Central Bank of Iran, he believes that developing and growth this asset sector will bring on youth employment, as well as to help nullify the effect of sanctions.

At the same event, The Central Bank of Iran (CBI) recently approved a “Policy and Regulatory Framework for Cryptocurrencies”, reaffirming its role as the primary regulator. The framework emphasizes licensing crypto brokers and custodians under CBI supervision while ensuring compliance with anti-money laundering (AML) laws, counter-terrorism financing (CTF) regulations, and tax obligations.

The Central Bank of Iran Governor Mohammadreza Farzin highlighted collaboration with other agencies, such as the Ministry of Economic Affairs and Finance, to develop robust regulatory mechanisms for the digital asset ecosystem.

According to the official, the mentioned framework focuses on active regulation and leveraging digital currencies’ economic potential.

In 2018, Iran banned trading and possession of cryptocurrency due to money laundering and terrorism financing concerns. [1] All Iranian financial institutions, such as banks, credit institutions, and currency exchanges, were banned from handling cryptocurrencies or promoting them in any way. [2] In 2019, however, the government began to roll back this ban as sanctions were crippling their local currency. Cryptocurrency was seen as a possible relief from reliance on the United States dollar. [3] The Central Bank of Iran’s new regulations allow for the possession and mining of cryptocurrency but still included a ban on using digital currency as a payment system. [4] Further, “it bars Iranians from holding large amounts of global cryptocurrencies in the same way they are officially prohibited from holding more than 10,000 euros.” [5] Towards the end of 2020, the Iranian government once again began exploring the possibility of reimplementing more controls on cryptocurrency as the price of Bitcoin was soaring, and the Iranian stock market and currency were severely falling. [6] The only change that has happened to the regulations so far is more restrictions on cryptocurrency miners due to heavy energy usage. [7]