In the latest chapter of the intensifying conflict between Iran and Israel, cyberwarfare has emerged as a parallel battlefield, severely affecting both infrastructure and civilian life. Iran imposed a near-total internet blackout last week, a defensive move in anticipation of an online Israeli incursion, according to Cloudflare data showing a 97% drop in Iranian internet traffic.

The blackout has deprived everyday Iranians of vital access to information. Government spokesperson Fatemeh Mohajerani acknowledged the measure, stating it was meant to prevent further cyberattacks following an Israeli-linked hacking group’s claims of breaching Iran’s state-owned Bank Sepah.

$90M Crypto Burn and Bank Attacks

On Wednesday, the Israel-affiliated hacker collective Gonjeshke Darande—Farsi for "Predatory Sparrow"—claimed responsibility for hacking Iran’s Nobitex cryptocurrency exchange. Elliptic, a crypto crime consultancy, confirmed that over $90 million had been drained and effectively destroyed by sending it to “vanity addresses” inaccessible without cryptographic keys.

The attack came just one day after the group declared it had already destroyed data at Bank Sepah. These developments mark a severe financial blow and underscore the vulnerability of Iran’s digital infrastructure under warfare conditions.

Surveillance Through Home Cameras

In retaliation, Iran has been reported to hijack Israeli home security cameras for ground-level surveillance. According to Bloomberg, this tactic appears to be aimed at real-time intelligence gathering. Though disturbing, experts argue that such surveillance offers less strategic impact compared to crippling an opponent’s central banking system. Similar tactics have been attributed to Hamas and Russian-linked hackers.

Civilian Connectivity Caught in Crossfire

While Iran partially restored internet services by Friday, the New York Times noted that access remains unstable and likely temporary. Many Iranians still struggle to regain stable digital communication, further isolating them in a time of uncertainty and fear.

Digital Warfare's Rising Role

Cyber elements have long been entwined with the Iran-Israel rivalry, dating back to the Stuxnet worm that targeted Iran’s nuclear centrifuges over a decade ago. Today, with the conflict intensifying across air, sea, and cyberspace, both nations are escalating digital offensives that not only strike at state institutions but also destabilize daily life for ordinary citizens.

While Iran tries to retaliate in kind, the sophistication and success of Israel’s cyberattacks have revealed a significant imbalance in digital capabilities. The civilian cost—both financial and psychological—continues to grow as digital war becomes an inseparable part of conventional conflict.