Michael Doran and Zineb Riboua
WSJ, July 20, 2025
“The strikes on Bank Sepah and Nobitex undermined the regime’s legitimacy in the most intimate way: by denying loyal officials and security personnel access to their own money.”
The 12-day war between Israel and Iran featured an unprecedented cyber campaign against the Islamic Republic’s financial system. Previous state-sponsored hacks aimed to steal data, ransom assets or disrupt operations. Israel did something far more radical: It destroyed digital assets and banking records to undermine the regime. Israel’s success offers the Trump administration new tools for confronting the Iranian threat.
Israel first struck Bank Sepah, Iran’s oldest and largest state-owned bank. The central financial institution of the Islamic Revolutionary Guard Corps, Bank Sepah serves Iran’s military and security forces, processing everything from salaries and pensions to sanctions-evading missile funds. Predatory Sparrow, a hacker group linked to the Israeli government, claimed credit for erasing Bank Sepah’s banking data and rendering its systems inoperable. Automated teller machines went dark, and online and in-branch services shut down. Salary and pension payments halted.
As panic spread, a run on all banks ensued. Iran’s largest commercial bank, Bank Melli, though untouched by the hack, couldn’t meet the demand for cash. The Central Bank of Iran tried to stem the crisis by printing money and injecting reserves into the system, but confidence had already collapsed. The Tehran Stock Exchange crashed, and the rial, Iran’s currency, collapsed, losing more than 12% of its value after the first day of the war. Authorities suspended trading. Private currency exchanges shut down rather than sell U.S. dollars at unsustainable rates. …SOURCE