The Iranian exchange Wallex had its stablecoin addresses blocked by both Circle and Tether, reported on-chain investigator ZachXBT. According to his Telegram channel, around 2.49M in funds is now inaccessible.
On-chain investigator ZachXBT noted the Wallex exchange had one of its wallet addresses frozen by both Circle and Tether. The address identified by ZachXBT currently contains only around $100K in stablecoins, but it may never be used again.
The exchange moved some of the funds to another address, with $2.49M in $USDT frozen and unable to move further. Circle and Tether reacted to the freeze after ZachXBT tipped them on the addresses belonging to Wallex.
Wallex consolidates crypto assets
ZachXBT also noted Wallex began consolidating crypto assets from its known hot wallets on TRON and Ethereum. Most of the $USDT used in Iran runs on the TRON network, but Ethereum remains an option, as long as the addresses are not flagged.
Reportedly, Wallex bridged multiple assets to $BNB Chain, using several bridge apps. $BNB Chain is also tracked, but there are fewer reports of locked assets.
This is not the first sanction against Iranian exchanges. The loss is also relatively minor compared to the Nobitex hack in 2025, which took away over $81M.
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Despite this, the relatively fast freeze shows there is a pipeline to limit sanctioned crypto usage. For some, this is a double-edged sword, allowing censorship on legitimate transactions.
Recently, Circle also sanctioned 16 USDC addresses, limiting the usage of business hot wallets. ZachXBT noted Circle froze the addresses due to ongoing US civil lawsuits, with details still undisclosed. For now, the businesses seem fully unrelated.
In the past, ZachXBT has helped identify addresses linked to hacks and scams, though usually only a fraction of the funds are frozen.
Iran crypto exchanges operate in crisis mode
Ahead of the asset freeze, Iran also saw a rush to withdraw crypto from exchanges. As Cryptopolitan reported, at the start of the war in Iran, crypto withdrawals surged by 700%, reflecting the role of self-custody in extreme situations. Currently, Iran is on day 26 of its Internet connection blackout, severely limiting crypto transfers.
In addition to the wallet freezes, the Iranian crypto industry is virtually stalled after Iran shut down 99% of its internet connectivity. Wallex also stopped some of its operations, citing electricity loss in its Asiatech data center.
According to a TRM Labs report, Iranian exchanges have been in crisis mode since early March. The exchanges also tried to limit $USDT usage, as the asset is closely watched for sanctioned activity. At the same time, since the crash of the Iranian currency to virtually zero, $USDT was one of the tools used for trading and to offset hyperinflation.
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