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Iran Strike Wipes $128B From Crypto Before Snap Rebound
US freezes $344M in Iran-linked crypto after strike kills 21; Bitcoin drops to $63K, rebounds above $72K. Next catalyst: de-escalation.
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A missile strike on a sports hall in Lamerd, Fars province, killed at least 21 people on February 28, including four children and members of a women’s volleyball team. Iran’s Foreign Ministry spokesperson Esmaeil Baghaei called it a “despicable war crime” and accused the United States of carrying out the attack jointly with Israel. Within hours, Bitcoin shed $128 billion in market capitalization, dropping to roughly $63,000. Ceasefire reports then circulated, and the price snapped back above $72,000.
US Central Command denied involvement and suggested the munition’s characteristics matched an Iranian Hoveyzeh cruise missile. Independent weapons analysts and media investigations linked the weapon to the American PrSM. A separate strike on a school in Minab compounded the civilian toll.
Separately, US authorities froze $344 million in cryptocurrency wallet assets linked to Iran’s Central Bank. That enforcement action pulled back the curtain on something regulators have long warned about: Iran’s use of crypto infrastructure to circumvent international sanctions.
Iran has been under some form of US financial sanctions for decades. Traditional banking channels were largely severed years ago. Crypto, particularly stablecoins like Tether that move freely across borders without touching correspondent banking networks, became an obvious workaround. The $344 million freeze suggests the scale of that workaround was significant.
Missile Strike and the $344 Million Wallet Freeze
The Lamerd attack and the wallet freeze occurred on the same day, creating a dual shock for crypto markets. The freeze targets wallets tied to Iran’s central bank, not retail traders. The signal is broader, though. US authorities demonstrated they can identify and seize crypto assets linked to sanctioned entities, even those routed through multiple hops.
How the Freeze Affects Market Confidence
The reduction in perceived anonymity is the immediate consequence. Compliance teams at exchanges and OTC desks will tighten screening, potentially slowing settlement times for legitimate trades originating from the region. Key insight: The freeze does not directly threaten Bitcoin’s liquidity. It increases regulatory risk for any counterparty touching Iranian-linked wallets.
Iran’s Crypto Workaround Exposed
Iran has relied on crypto to bypass banking sanctions since the mid-2010s. Stablecoins denominated in the Iranian rial exist on small exchanges. Those tokens now face a direct freeze risk. Traders holding such assets should expect reduced liquidity and potential delistings from major platforms.