Online gold platforms thrive in Iran as economic pressures mount

Recent reports by Iranian media and social media users had fueled speculation that Zanjani, once Iran's richest man, might be involved in launching a cryptocurrency bank, suggesting his return to economic activities.

“In light of the speculation regarding changes in Babak Zanjani's status and reports by some media outlets suggesting his release, the previous statements by the Judiciary Spokesperson on this matter remain accurate, and no changes have occurred in his status,” state-controlled ISNA quoted the office of the Judiciary as saying.

The Judiciary further stated that Zanjani, like other defendants who have shown remorse and have cooperated, is receiving assistance under judicial directives and the supervision of special investigators. The former tycoon has also been granted the opportunity to take compensatory actions in coordination with relevant authorities.

The Judiciary has affirmed that Zanjani's foreign assets have been located and brought back to Tehran. The Central Bank Governor has corroborated this, confirming that the returned assets, in the form of foreign currency, have been entirely deposited into the bank's treasury.

Zanjani gained notoriety during Mahmoud Ahmadinejad's presidency for his role in evading international sanctions against Tehran. As a key intermediary, Zanjani helped the state sell oil and secure foreign currency, amassing considerable wealth and influence in the process, despite the restrictions related to Iran's nuclear activities.

Zanjani later faced accusations of embezzling billions of dollars from Iran's state oil revenues, leading to his arrest in December 2013 and subsequent charges of corruption. His 2016 death sentence, although never carried out, was reported by media outlets across the globe.

Ali Shadmani, the deputy coordinator of IRGC's Khatam-ol-Anbia Central Headquarters said: "Whenever necessary, we make military purchases to strengthen our air, land, and naval forces. [...] The production of military equipment has also accelerated."

Referring to Iran's regional archival Israel, he warned: "If the enemy acts foolishly, it will taste the bitter taste of being hit by our missiles, and none of its interests in the occupied territories will remain safe."

Shadmani did not specify whether the jets have already been delivered to Iran.

In November 2023, Iran's state media said Tehran had finalized arrangements to buy Russian fighter jets.

Iran announced its intention to purchase of Sukhoi-35 fighter jets from Russia in 2022. Iranian officials announced on several occasions during the past few years that Russia would sell several Sukhoi Su-35 fighter jets to Iran, but such claims had never yielded any results. 

The negotiations for advanced Russian fighter jets date back to 2007 when Iran explored acquiring Su-30MKs. However, United Nations sanctions and Russian hesitation halted the potential deal. Renewed discussions in 2015 for Su-30SM jets, including a request for domestic production rights, were also unsuccessful.

According to German aviation industry magazine Flug Revue, the first two Sukhoi Su-35SE fighter jets were officially handed over to the Iranian air force on November 18, during a private ceremony at the Komsomolsk-on-Amur Aircraft Plant (KnAAPO), the German outlet said.

The two aircraft were transported disassembled on an Antonov An-124-100 cargo plane to Mehrabad Airport in Tehran. After arrival, they were moved to the 3rd Tactical Air Force Base near Hamadan for assembly.

Initially, the order was for 25 Su-35SE aircraft to replace the IRIAF’s aging US-made Grumman F-14A Tomcats stationed in Isfahan, but it was later expanded to 50 units to also replace F-4E Phantom II aircraft based in Hamadan.

The Russian air force has also suffered losses in combat during its invasion of Ukraine and has not been able to establish air superiority against a much smaller enemy air force.

Faced with a technologically outdated air force comprised of a few dozen strike aircraft, some dating back to the pre-1979 revolution era, Iran has prioritized the development of drones and missiles.

Iran has supplied hundreds of drones to Russia that have been used to target Ukraine's military and civilian infrastructure, according to the United States. Moscow denies that its forces use Iranian-built drones in Ukraine, although many have been shot down and recovered there.

In November 2023, satellite imagery showed the construction of a plant in Russia to mass produce Iranian-designed Shahed-136 drones, according to the Institute for Science and International Security. The Yelabuga drone factory opened in July 2023.

Iran has also expressed interest in acquiring other advanced military technology from Russia, such as the S-400, a mobile surface-to-air missile system.

In October, Israeli air strikes knocked out Iran's last three Russian-provided S-300 air defense missile systems. The surface-to-air S-300s were the last in the Islamic Republic's arsenal after one was destroyed in an attack in April also carried out by Israel.

Iran had acquired the four S-300 battalions from Russia in 2016.

Earlier this month, Iran and Russia signed a comprehensive strategic partnership which did not mention arms transfers but said the two will develop their military-technical cooperation.

According to a joint statement by Israel police and Shin Bet, the two suspects had been lured by social media, as seen in previous cases.

"They understood that they were in contact with an Iranian operator, based, among other things, on their media publications, which revealed at the time the arrest and interrogation of Israeli citizens who were in contact with Iranian intelligence elements and carried out similar missions for them," the statement said.

The pair have been named as Yuri Eliaspov and Georgi Andreev, residents of Krayot in northern Israel.

Eliaspov, the main suspect, admitted that he sent his Iranian operator a video he recorded of the Iron Dome operating system. "I got into a difficult financial situation,” he told prosecutors.

Iranian spy plots in Israel increased 400% last year in the wake of the Gaza war, with dozens of cases in Israel foiled involving dozens more Israeli citizens. Some of the most serious included plots to murder the likes of Israel's Prime Minister and Defense Minister.

Superintendent Sarit Peretz, an investigation officer in the National Unit for the Investigation of Serious and International Crime in Lahav 433, said in a statement: "Yuri Eliaspov is charged with the offense of aiding the enemy in war, the most serious offense in the law book, the penalty for which is life imprisonment or death,” though Israel has only enacted the death penalty twice since its founding in 1948.

“Anyone who received Yuri's video [of the Iron Dome] and understands these systems could act against the State of Israel, which is very dangerous. The video contains very sensitive information," she added.

She said that Eliaspov claims only to have sent part of the video and not all of it. “Even the part he says he sent contains great danger,” she said.

Israel's Iron Dome air defense system is 90 percent effective and has protected the country from thousands of missile, rocket and drone attacks from Iran and its allies around the region such as the Houthis in Yemen and Hezbollah in Lebanon.

Asher Ben-Artzi, the former head of Israel’s Interpol, said the cases show a constant pattern in how Iranian intelligence is working to recruit Israeli citizens.

“They manage to recruit Israelis, mainly from the weakest strata of society, to whom they promise to make easy and quick money. This affair that has now been revealed was a great success for them after they managed to locate a reservist stationed in a sensitive unit and the assessment of the security officials is that the information they provided did indeed cause damage,” he told Iran International.

“The fact that they gained access to IDF soldiers, even in reserve service, is very worrying.”

The two were lured like others in recent months, by initially being asked to spray ‘children of Ruhollah’ graffiti in Tel Aviv, referring to the original founder of the Islamic Republic.

Eliaspov then shared the opportunity with his friend Andreev, and convinced him it was easy money.

By the time he was caught, Eliaspov had earned $2,500, while Andreev only $50. Both have admitted they are guilty of the charges and remain in custody until the next hearing on Friday in Haifa.

The pair began communicating with the agent in late September and have been under investigation for two weeks. They were both discharged immediately from Israeli military service.

“The increase in the price of certain medications has shocked the public, with three out of every ten people who enter a pharmacy choosing not to purchase their medication," said Hadi Ahmadi, a board member of the Iranian Pharmacists Association, on Sunday.

"Why should such a situation occur where people refuse to take their medication or cannot afford to buy it? Out-of-pocket expenses for outpatient treatments have risen and now exceed 50%."

Reports have highlighted the financial strain caused by medication price increases. According to Tasnim News Agency, medication costs have surged by up to 400% since the removal of subsidized foreign currency.

Labor union activists and retirees warn that these steep prices are putting essential treatments out of reach for many, including those at risk, as more than one third of Iran is now living below the poverty line.

Shahram Ghaffari, Deputy for Treatment at the Social Security Organization, said on Sunday that the Food and Drug Administration implemented the increases to address shortages and support producers.

However, he criticized the lack of coordination with insurance providers, which has left patients covering the full cost of the hikes.

"Prices were not updated in insurance systems," he explained, "resulting in significantly higher out-of-pocket costs."

President Masoud Pezeshkian’s 2025 budget reduces foreign currency allocations for essential goods by 20%, while increasing the subsidized exchange rate by 35%.

Pharmaceutical manufacturers, already grappling with higher production costs, face significant challenges securing the resources they need.

The broader economic downturn has exacerbated the problem. Iran’s rial has lost nearly 40% of its value since September, further restricting the ability of the pharmaceutical sector to import raw materials.

Mehdi Pirsalehi, head of the Food and Drug Organization, said earlier in January that the government owes over $4.47 billion to pharmaceutical companies, with additional debts for medical equipment.

While Health Minister Mohammadreza Zafarghandi has promised to alleviate the burden by compensating insurance companies, critics argue the measures fall short.

The government’s elimination of a $9 billion subsidy for essential goods in 2022, which was introduced to counter earlier currency crises, is widely blamed for exacerbating inflation and shortages.

Now, as president Pezeshkian plans to reduce the allocation for importing essential goods—including agricultural products, pharmaceuticals, and raw materials—to €12 billion, as outlined in the 2025 budget released in October, both patients and healthcare providers are bracing for a challenging year ahead as the new Iranian year approaches.

Several Iranian human rights organizations, internet freedom programs and activists engaged in media and civil society work have received notices that their funds will be suspended for three months, Iran International has learned.

Trump signed an executive order on January 20, his first day in office, suspending foreign development assistance for 90 days to allow for a review of its efficiency and alignment with his America First policy stance.

Following the move, the State Department has halted most ongoing foreign aid programs and paused the initiation of new assistance, according to an internal memo distributed to officials and US embassies abroad.

Official government figures show Washington is the world's biggest donor of international aid, spending $39 billion in the 2024 fiscal year, out of which $65 million was allocated to funding State Department-administered Near East Regional Democracy (NERD).

The body is the main foreign assistance channel through which the United States has supported civil society and human rights in Iran since 2009, according to the Congressional Research Service.

“We have been told in writing that we must stop all work on the program and not incur any new costs after January 24th and cancel as many obligations as possible,” said one State Department grantee.

“It doesn’t look like anyone has given thought to the implications of this decision... The lack of clarity of the notice we received is just absurd. It is unclear how long this process will take,” the person added.

The State Department did not immediately respond to a request for comment.

Supporting internet freedom

Among the grantees are Persian media outlets that publish uncensored news for Iranian citizens, as well as human rights organizations that document abuses in Iran, which is instrumental in keeping the Islamic Republic accountable.

A part of the US funds also covers the expenses of Virtual Private Network (VPN) services which ordinary Iranians used to circumvent the Islamic Republic’s censorship. Many of these services will have to stop their operation following the aid cut.

“It is a very dangerous move, because the issue of internet freedom is very vital, both to the people of Iran and the allies of Iranian people in the West,” a cyber security expert based in Silicon Valley told Iran International on condition of anonymity.

Trump’s order, an internet activist told Iran International, deprives 20 million Iranians, or a fifth of the population, of US-supported VPNs they use to bypass Tehran’s internet curbs.

At their peak during the “Woman Life Freedom” protests in 2022, VPN usage in Iran hit two-third of the population. “In today’s Iran, the internet has no meaning without VPNs,” writes internet activist Soroush Ahmadi in an article for Peace Line journal, which is published by the Virginia-based NGO “Human Rights Activists in Iran”.

The VPNs commercially available in the Iranian market are believed to be controlled by the Islamic Republic and even sold by entities affiliated with the Revolutionary Guards who profit from the needs of Iranians to gain unfettered access to the internet.

During Trump’s first term in office in 2020, US government-funded technology companies recorded an increase in the use of circumvention software in Iran after boosting efforts to help Iranian antigovernment protesters thwart internet censorship and use secure mobile messaging.

Since the 2018 protests in Iran, Washington had accelerated efforts to provide Iranians more options on how they communicate with each other and the outside world.

These included providing apps, servers and other technology to help people communicate, visit banned websites, install anti-tracking software and navigate data shutdowns, The Financial Times reported in 2020 citing a Trump administration state department official.

The second Trump administration also seemed to be pursuing the same approach toward the Iranian people before the inauguration.

Maximum pressure on people or government?

Secretary of State Marco Rubio said in his Senate confirmation hearing earlier this month that “anything that we do with Iran needs to be clear eyed about who that regime is, but also who those people of Iran really are, because they're not their leaders.”

However, an internet expert told Iran International that the new decision “stands in contrast to the Trump administration’s stated position of supporting the Iranian people against the Islamic republic.”

“In reality, this policy will exert maximum pressure on the Iranian people rather than the government. It will trap Iranian citizens behind a digital wall and assist the government in building its national internet, effectively isolating the nation from the rest of the world,” the expert said.

‘Worst form of punishment’

The Silicon Valley-based cyber security expert says the contradiction between Rubio’s words and the executive order “will raise serious questions in the minds of many Iranians, because this is the worst form of punishment for the people of Iran.”

“With the relentless censorship and oppression by the Islamic Republic, if the current form of support for internet freedom outside Iran disappears, it would in a way be the greatest gift from the Trump administration to the tyrants in Tehran,” the expert added.

“With a stroke of the pen, Trump’s executive order and Rubio’s memo implementing it have done what the Iranian regime could not do after spending billions of dollars on their national Internet: cut off the last channel to the global internet that Iranians had,” said the Iranian internet activist.

The decision not only undermines the free flow of information and access to free internet for Iranian people, it also “disrupts many civil society activities, including secure communication with one another, which strengthens civil society and is essential for safe organization,” according to Ahmad Ahmadian, head of California-based tech non-profit.

“Moreover, it allows the Iranian government to dominate the public narrative by silencing people's voices through cutting off their access to information tools and censored social media in Iran,” added Ahmadian whose company Holistic Resilience aims to advance internet freedom and privacy by developing and researching censorship circumvention.

Big Tech

Last September, the White House convened a meeting with representatives of Amazon, Alphabet's Google, Microsoft, Cloudflare and civil society activists in a bid to encourage US tech giants to offer more digital bandwidth for government-funded internet censorship evasion tools.

The tools, supported by the US-backed Open Technology Fund (OTF), have seen a surge of usage in Iran and other authoritarian states that heavily censor the internet, Reuters reported at the time.

However, Big Tech may not be willing or able to continue their support for providing anti-censorship tools without the US government’s funds.

“The leadership of the US government has been crucial in urging big tech companies to provide public services,” says Ahmadian. “Without the encouragement of the US government, these companies wouldn't take the initiative on their own.”

After the nationwide 2022 protests began in Iran, the Iranian government severely restricted internet access for its citizens.

In response to the restrictions, which included complete and periodic internet shutdowns and slowing down of internet speeds, the US government lifted some curbs on exporting internet services to Iran, allowing Elon Musk’s SpaceX to provide satellite internet services.

By the end of 2024, the number of Starlink satellite internet users in Iran surpassed 100,000, a senior industry official in Iran said earlier this month, underscoring the keenness of Iranians to defy curbs on their access to the outside world.

Impact on human rights projects

However, the consequences of Trump’s executive order will not remain limited to internet censorship circumvention tools, activists say.

The pause in US foreign aid, a human rights activist told Iran International, “(will) impose restrictions on projects that address human rights violations or investigate governmental and military corruption which have impacted Iran's economy and social conditions in favor of foreign terrorist activities and money laundering.”

"This decision by the Trump administration would be a reciprocal gift to the Islamic Republic and its corrupt officials, the Revolutionary Guard, and money-laundering networks in the West," the activist, speaking on condition of anonymity, added.

The activist said several non-Iranian American institutions have been using these funds to investigate corruption and money laundering by the Islamic Republic in environmental and construction sectors. “These organizations will be forced to halt their activities,” he added.

Several activists speaking to Iran International believe that if the projects related to promotion of human rights and internet freedom in Iran do not receive an exemption within the next month, they will either collapse entirely or be deeply curtailed.

“The impact of this freeze might not be immediately noticeable, but its severe implications will become evident over time,” a second human rights activist said.

Internet experts warned that even if US aid starts again in three months, the damage is irreversible since many people had migrated to vulnerable domestic VPNs and might never fully return to using US-backed secure services.

“This issue jeopardizes both the freedom of information and the security of individuals," said the Silicon Valley expert.