Blockchain analysts are sending mixed signals about how Iran, one of the most active crypto markets, is reacting to the ongoing military attacks by the US and Israel.

Analysts at Elliptic claim that outflows from Iranian crypto exchange Nobitex, which has 11 million users, surged within minutes of the first US-Israeli attack on Iran, with outgoing transaction volumes spiking by 700%.

"The surge in crypto asset outflows last Saturday potentially represents capital flight from Iran," they said, adding that Iranians convert local currency, the rial, to crypto assets and send them to their wallets to move the funds out of Iran, while bypassing restrictions imposed by the Western-dominated financial system.

However, the rial has already been trading virtually at zero against the US dollar for some time now, and crypto asset outflows have occurred since the start of January, per Elliptic.

Meanwhile, analysts at TRM Labs caution against drawing conclusions regarding capital flight at this time. According to them, Nobitex recorded roughly $3 million more in total inflows and outflows following the initiation of US-Israeli strikes. However, these flows are not necessarily outliers in the context of routine operations.

"It appears that the country’s crypto ecosystem is not showing signs of acceleration or capital flight, but instead experiencing a downturn in both transactions and volume as the regime enforces strict internet blackouts," TRM said, suggesting that regime-linked actors might be using the situation to reposition their capital.

What's more, as noted by Elliptic, even during internet outages, some outflows are seen, suggesting that someone had access to Nobitex's holdings even when its website was inaccessible.

Besides internet outages, local users also face restrictions on how they can use crypto platforms. For example, withdrawals were suspended or batched, market depth was reduced, and some platforms, under direction from Iran’s Central Bank, temporarily halted the tether (USDT)-Iranian toman (TOMAN) trading pair.

This is the primary crypto-fiat bridge in Iran, and by halting this pair, the central bank was trying to slow fiat repricing during peak volatility.

“Since the escalation of hostilities, Iran’s crypto ecosystem has remained operational, though in a highly constrained and risk-managed state,” TRM concluded.

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