Israeli Man Accused of Spying for Iran in Exchange for Crypto — What’s Going On?

Israeli authorities have arrested a 27-year-old Tel Aviv resident on suspicion of spying for Iran in exchange for cryptocurrency, a case that deepens concerns about the use of digital payments in modern espionage.

The man was taken into custody on Sunday by the Shin Bet security service and Tel Aviv police.

According to investigators, he had been in contact with Iranian operatives for several months and allegedly carried out intelligence-gathering tasks at their request.

Local outlets reported these included photographing the homes of Israeli public officials, documenting military bases, and spray-painting graffiti as instructed.

Crypto Allegedly Used to Fund Espionage Activities for Iran

Authorities say the suspect received thousands of dollars in virtual currency. During a search of his home, they seized computers and digital storage devices. These are believed to have been used to communicate with his Iranian handlers.

He appeared in court on Monday. The Tel Aviv Magistrate’s Court extended his detention until June 26.

Meanwhile, investigators are still reviewing the materials seized from his home. They are working to determine the full extent of his activities.

In a joint statement, the Shin Bet and Israeli police warned of ongoing efforts by Iranian intelligence and affiliated terror groups to recruit Israelis.

They noted that these recruitment attempts often begin through social media. As a result, they urged the public to avoid any contact with foreign actors and to report suspicious outreach immediately.

Security officials vowed to treat such cases with the “utmost severity,” warning that Israeli citizens caught aiding hostile nations would face the full force of the law.

Iran Tightens Crypto Controls After $90M Exchange Breach

The arrest comes at a time of heightened tension between Iran and Israel, with both countries engaged in a long-running shadow war that spans cyberattacks, intelligence operations and regional proxy conflicts. The digital nature of this latest case highlights how cryptocurrencies are increasingly being used to mask payments in covert operations.

Just last week, Iran’s central bank moved to restrict operating hours for domestic crypto exchanges after a cyberattack drained more than $90m from Nobitex, the country’s largest trading platform.

That directive, aimed at improving oversight, shows how digital assets are becoming central to both financial infrastructure and geopolitical maneuvering.