David G.W. Birch,
In mid-2025, 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. While Israel’s success has undoubtedly been noticed by a US administration looking for new tools to confront what they see as a clear and present threat, it has surely also been noticed by central banks and regulators who have talked with ensuring resilience in payment systems.
Resilience Is More Than Bunkers
Wars are not only about soldiers and bombs and tanks and things. They are also about money, and attacks on the financial infrastructure of an enemy can be as effective as kinetic assaults. One of my favorite examples highlights the rise of the City of London in England’s ascent to global power. In 1587 it was City financiers who “cornered" bills of exchange drawn on Genoan banks so effectively that they were able to disrupt the build-up of resources for Phillip II's Great Armada, demonstrating how sophisticated economic warfare had become by the 1580s.
Well, four centuries on, in June of this year, an Israeli hacking group known as “Predatory Sparrow” infiltrated the Iranian Bank Sepah’s systems and destroyed critical data leading to a shutdown of customer services, failures at connected banks (including Kosar Bank and Ansar Bank, both linked to Iran’s military) and disruption in the retail payments network. The following day the group attacked an Iranian crypto exchange called Nobitex and stole $90 in cryptocurrency. Rather interestingly, instead of making off with the loot, the hackers sent the proceeds to addresses with no owners, effectively destroying the value and making recovery impossible, in order to emphasize the political, rather than financial, nature of the raid.
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