Middle East Crypto History

In the early hours of June 18, 2025, while tens of millions of Chinese were staying up all night to snap up discounted goods, Nobitex, Iran's largest cryptocurrency exchange, was also "liquidated."

A hacker group called Gonjeshke Darande, which means "plundering sparrow" in Persian, posted on X, claiming that they had hacked into Nobitex's hot wallet and stolen more than $90 million. Just the day before, this group had attacked Bank Sepah, one of Iran's largest state-owned banks.

Then, they did something rarely seen in hacking history.

They transferred the entire $90 million to eight "black hole addresses" and destroyed it. These wallets, lacking private keys, meant the funds could never be withdrawn once deposited. Ironically, these addresses all contained phrases like "FuckIRGCTerrorists," IRGC being an abbreviation for the Iranian Revolutionary Guard. Blockchain intelligence firm Elliptic later pointed out that generating such an address would require hackers to brute-force a large number of encryption key pairs until they found one containing the desired text. Hackers going to such lengths were clearly not motivated by economic gain. Twelve hours later, Nobitex's source code and internal documents were all made public. Independent investigator Nariman Gharib analyzed these documents and found that the $90 million destroyed almost perfectly matched the IRGC-related funds that had flowed into Nobitex through specific wallets in the preceding months. Therefore, rather than a theft, it was more like a targeted on-chain purge for political purposes. When we talk about crypto in the Middle East, we often picture Dubai licenses, the Token 2049 conference, and the after-party on Palm Jumeirah. But there's a more hidden, more intricate world that those who don't live there are completely unaware of. Few can clearly explain: What exchanges do Iranians use? Why is cryptocurrency so prevalent in Turkey? Why is Kuwait the country with the strictest crackdown on mining in the Middle East? The story of Nobitex might be a key to unlocking this world. From Chemical Engineer to Iran's "Zhao Changpeng" After the US-Israel war against Iran, a news story brought Nobitex to the public eye: within minutes of the airstrikes beginning, the exchange's withdrawals surged by 873%. Nobitex's founder is Amir Rad. He doesn't have a finance background; he's an engineer who graduated from Sharif University of Technology with a degree in chemical engineering, and before starting his business, he worked in process safety and risk assessment in the petrochemical industry. Last year, he appeared on Karnakon Podcast, a popular Iranian business podcast. Interestingly, the show's title roughly translates to "Don't Be a Laborer!" in Chinese. According to Rad, in 2017, he and three friends, as a crypto retail investor, founded Nobitex. The initial idea was simple: to allow Iranian users to deposit rials and place orders to buy and sell digital assets. That's how it started. But the results were far better than they had anticipated. A few months after its launch in 2018, Iranian regulators' hostility towards crypto led to a year-long complete shutdown of Nobitex. But it was so popular that even under shutdown, the platform maintained 20% organic growth per month. To date, Nobitex has 11 million registered users and a total inflow exceeding $11 billion, surpassing the combined total of the next ten largest Iranian exchanges. What does 11 million mean? Iran has a total population of 89 million, meaning one in eight people has registered on Nobitex. Excluding minors and the elderly, the actual penetration rate is even higher. This figure is roughly equivalent to that of Kraken, a long-established, compliant US exchange. A chemical engineer, in eight years, built an exchange covering one-eighth of the nation's population. If the story ended there, it would be a pretty good entrepreneurial legend. But the story didn't end there. Since 2024, open-source intelligence has revealed that Nobitex's major shareholders include relatives of Supreme Leader Khamenei and business partners of Mohsen Rezaee, the founder of the Revolutionary Guard. Elliptic's on-chain analysis shows that Nobitex had financial transactions with sanctioned Russian exchange Garantex, as well as wallets associated with Hamas and the Houthi rebels. How did a private company become the front for the highest echelons of power? We don't know the details. But in Iran, this scenario is not unfamiliar. Digikala (the Iranian version of Amazon) and Snapp (the Iranian version of Didi) both received "strategic investments" from shell companies affiliated with the Revolutionary Guard or the state telecommunications group after they grew large. In this country, once a private enterprise reaches a certain size, someone will "help" it. However, the implications of Nobitex are far more sensitive than those of e-commerce and ride-hailing. In internal documents released by "The Sparrow of Plunder," Gabriel traced a special account. This account was responsible for coordinating tens of millions of dollars flowing from the Revolutionary Guard's financial network into Nobitex. However, unlike the other 11 million users on the platform, it was completely exempt from KYC verification. Everyone else had to verify their identity, except for the account that transferred Revolutionary Guard funds. Analysis of the leaked source code by TRM Labs showed that this account was not registered under the identity of a military officer. It's more like an invisible channel within a system, affiliated with a shell import/export company under the Quds Force of the Revolutionary Guard, a VIP whitelist specifically serving those exposed for political crimes. However, overseas, the name of the person connecting with this phantom account is no secret: Babak Zanjani. Zanjani's resume reads like a spy novel: sanctioned by OFAC in 2013, sentenced to death in Iran in 2016 (for misappropriating billions of dollars from the national oil company), his sentence commuted in 2024, and he was released in 2025. The U.S. Treasury Department stated that he was released to continue laundering money for the regime. In May 2021, a company called Zedxion Exchange Ltd was registered in the UK. Five months later, a person named Babak Motza was listed as a director and de facto controller. The U.S. Treasury Department later confirmed that this person was indeed Babak Motza Zanjani. In July 2022, Zanjani disappeared from company records. A few days later, Zedcex Exchange Ltd was incorporated at the same London address and under the same successor director. Both companies claimed to be "dormant." On paper, there were only nominal directors and virtual office addresses. But the on-chain data tells a completely different story. Analysis by TRM Labs shows that Zedcex has processed over $94 billion in transactions since its inception. The two exchanges combined processed approximately $1 billion for the Revolutionary Guard, accounting for 87% of the platform's total transactions at its peak in 2024. Funds flowed in USDT on the TRON blockchain, shuttling between Revolutionary Guard wallets, offshore nodes, and Nobitex. The OCCRP (Organized Crime and Corruption Reporting Project) investigation uncovered further details. The registered address of both exchanges, 71-75 Sheldon Street, Covent Garden, London, was a batch-registered virtual office address, with over a dozen companies registered under the same address, including at least six sanctioned entities. Both exchanges' official videos featured an "Executive Director" named "Elizabeth Newman." OCCRP discovered that this person did not exist. The female figure in the video came from commercial material on a stock photo website tagged "Pretty Black woman talking to camera." Fictional characters, ghost companies, and astronomical on-chain transactions. But OCCRP initially only had indirect clues. Although Zanjani's name had appeared in Zedxion's board records and white paper metadata, he had long since withdrawn from all public documents. The real breakthrough was a cat. In May 2024, Zedxion's official Telegram channel posted a photo of a gray and white cat with a conspicuous purple bell around its neck. A few months later, a cat with the exact same fur color, markings, and purple bell appeared on the Facebook page of Zanjani's girlfriend, Solmaz Bani. Following Barney's lead, the reporter discovered she was the registrant of the Zedxion newsletter domain, and her name also appeared in Zedxion's email login information. In Zedxion's official YouTube tutorial video, two names briefly flashed in the autofill field: Solmaz and Babak. Even the Revolutionary Guard's money laundering network has nowhere to hide in the face of cats. "We endured the darkness, while they mined Bitcoin." Remember the $90 million Nobitex suffered? It turned out that it was likely Revolutionary Guard money. But from the outside, it looked like a leading exchange had a $90 million hole in its books. If not addressed promptly, a run on the exchange could have occurred at any time. Nobitex chose to cover the loss itself. TRM Labs discovered that after the hack, Nobitex quickly consolidated approximately $2.7 million from over 100 long-dormant wallets to alleviate the liquidity crisis. These wallets accumulated mining rewards in 2021 and 2022, with no funds transferred previously. The upstream can be traced back to two major global mining pools: EMCD and ViaBTC. We cannot confirm whether this money came from external funding or Nobitex's own mining coffers. However, this incident provides a glimpse into Iran's massive mining industry. Crypto mining in Iran became legal in 2019. Licensed miners are allowed to mine Bitcoin using subsidized electricity, which is then sold to the central bank, which uses it to pay for imports, bypassing the dollar system. The government sets the price of industrial electricity at 0.5 cents per kilowatt-hour, making the cost of producing one Bitcoin approximately $1,320. Even with the price of Bitcoin falling to $60,000-$70,000, the profit margin remains astonishing. This profit margin explains everything that followed. In 2022, parliament passed a law allowing the military to build private power plants. The Revolutionary Guard directly obtained electricity originally intended for cities. Mines were located at military bases and special economic zones. The large religious foundation Astan Quds Razavi, directly controlled by the Supreme Leader, was deeply involved, forming a de facto "mining cartel." As of 2023, of Iran's approximately 180,000 mining machines, 100,000 belonged to state-owned or Revolutionary Guard-affiliated companies. However, Iran is also a country severely lacking in electricity, and rolling blackouts during extreme weather are not uncommon. Not only are residents affected, enduring extreme heat or cold, but frequent factory shutdowns lead to unemployment among industrial workers, and small businesses struggle due to unreliable power supplies. This has sparked protests with slogans such as "We endure darkness, while they mine Bitcoin." Where are the mining rigs hidden? A widely circulated claim is in mosques. In Iran, mosques are legally entitled to free electricity. The 2025 budget law exempted all Revolutionary Guard bases, Basij centers, and mosques from electricity bills, while electricity prices for ordinary citizens increased by 38% that same year. In 2019, an Iranian researcher photographed approximately 100 mining rigs distributed across different rooms in a mosque, fueling this claim. However, some industry insiders hold the opposite view. Urban transformers have load limits, and large-scale mining can lead to system overload or even explosions. If the government wanted to mine, they certainly had more concealed locations. Regardless of where the mining rigs are located, one figure cannot be ignored: the computing power of illegal mining is approximately 400 times that of legal mining. Iran's Ministry of Energy's national power company, Tavanir, had to offer a bounty to catch miners. The initial reward for reporting each illegal mining rig was 1 million toman (approximately $24), later increased to 200 million toman (approximately $2,300). The lower classes are reporting each other for $24, bearing the burden of rising electricity bills. Meanwhile, mining farms with military protection are thriving. In 2021, when the Department of Energy attempted to shut down a mining farm, Revolutionary Guard personnel arrived and physically prevented the raid. This is the underlying nature of Iranian crypto: one country, two sets of rules. The other side of the Gulf As mentioned earlier, the cost of producing one Bitcoin in Iran is approximately $1320. In Kuwait, across the Persian Gulf, this figure is $1400. Where there's high profit, there are bound to be those willing to take risks; it's just that the Kuwaiti chose their own bedrooms. To avoid suspicion from officials, miners would even turn off their home air conditioners to conceal the power consumption of their mining rigs. In 2023, Kuwait completely banned cryptocurrency activities, but the ban couldn't stop the profits. In April 2025, the Ministry of the Interior raided and seized over 100 illegal mining farms, causing electricity consumption in the southern Al-Wavra region to plummet by 55% within a week. The story of mining has different versions in different countries, as does the story of currency devaluation. Why did Nobitex grow so rapidly in those years? Because it coincided with the period when the riyal was collapsing the most; in 2018, it was worth 92,000 riyals to 1 US dollar on the black market, but now it has fallen below 1.5 million riyals. The Turkish lira is following a similar path, with inflation consistently exceeding 30%. The annual trading volume of USDT/Trira on Binance exceeds $22 billion, larger than any Bitcoin trading pair. Between 2024 and 2025, Turkey received nearly $200 billion in crypto assets, with over half of its adults holding crypto assets. Distrusting their own currency, they can only trust the on-chain US dollar, even though many don't like the US. This is happening daily in Tehran and Istanbul. While some are struggling to preserve their purchasing power, many other countries in the Persian Gulf are already discussing the next era. The UAE has incorporated crypto into its national financial infrastructure blueprint, Dubai and Abu Dhabi have each established virtual asset regulatory bodies, the Adirham stablecoin has been approved for listing, and annual crypto inflows have reached $53 billion. The same technology is a survival tool on one side of the Gulf, while on the other it's a calling card for attracting investment. However, what's truly ironic is that crypto branding events in the Middle East, such as Token2049 Dubai, originally scheduled for late April, have been postponed to next year due to the conflict with Iran. Israel, the arch-enemy that launched the attack on Iran, plays a more aloof role in the crypto world. This country lacks cheap electricity and doesn't need crypto to circumvent sanctions, yet it boasts the highest density of blockchain startups globally. Several core projects in the zero-knowledge proof field originated from Israeli teams, with StarkWare reaching a valuation of $8 billion in 2025. Although its token STRK plummeted by 90% after launch, becoming a prime example of a doomed project, its ecosystem remains largely unused.

The same bay, different worlds, yet they are now all embroiled in the same war. By the time this article was finished, some of the names mentioned were no longer alive. Khamenei died in an airstrike at the end of February 2026. Several high-ranking members of the Revolutionary Guard were eliminated in a joint US-Israeli attack. The funds that flowed through Nobitex via ghost accounts are still recorded on the blockchain, but the owners behind those addresses may have changed time and again.

The same bay, different worlds, yet they are now all caught up in the same war. By the time this article was finished, some of the names mentioned were no longer in use. Khamenei died in an airstrike at the end of February 2026. Several high-ranking members of the Revolutionary Guard were killed in a joint US-Israeli attack. Funds that flowed through Nobitex via ghost accounts are still recorded on the blockchain, but the owners behind those addresses may have changed many times over.