‘Hamster’ crypto craze gripping Iran highlights its economic malaise ahead of presidential election

DUBAI, United Arab Emirates (AP) — Cab drivers and bikers tap away furiously on their mobile phones as they wait at red lights in the Iranian capital during an early June heatwave. Some pedestrians in Tehran are doing the same. They all believe they could get rich.

The object of their rapt attention? The “Hamster Kombat” app.

A wider crypto craze aside, the app’s rise in Iran highlights a harsher truth facing the Islamic Republic ahead of Friday’s presidential election to replace late President Ebrahim Raisi, who died in a helicopter crash in May: an economy hobbled by Western sanctions, stubbornly high inflation and a lack of jobs.

Even as presidential candidates make promises about restoring the country’s economy, Iranians, who have been hearing for years about bitcoin, are now piling into this app out of sheer hope it might one day pay off — without knowing much about who is behind it.

“It’s a sign of being desperate, honestly,” said Amir Rashidi, the director of digital rights and security at the Miaan Group who is an expert on Iran. It’s about “trying to hang on to anything you have a tiny hope that might some day turn to something valuable.”

Those able to divest from holdings in Iran’s beleaguered currency, the rial, have purchased property, art, vehicles, precious metals and other hard assets since the collapse of Tehran’s 2015 nuclear deal with world powers.

At the time of the deal, the exchange rate was 32,000 rials to $1. Today, it’s nearing 580,000 rials to the dollar — and many have found the value of their bank accounts, retirement funds and other holdings gouged by years of rapid depreciation.

Meanwhile, prices of fruits and vegetables have jumped 50% since last year while the price of meat has risen 70%. The cost of a ride in a shared taxi, common in the Iranian capital, has almost doubled. Even rides in Tehran’s Metro, still the cheapest option for the city’s commuters, are up some 30%.

“Since morning, I had three visitors to my shop, none of them bought anything,” said Mohammad Reza Tabrizi, who runs a clothing shop in downtown Tehran. “Most customers prefer buying from peddlers or pre-owned items in other places.”

In underground walkways and other areas of the city, peddlers sell nearly anything they can get their hands on. It’s this desperate environment that has seen the public’s interest in cryptocurrency and mobile games offering coins rise.

The proliferation of smartphones across Iran, as well as the relatively low cost of mobile service compared to other nations, makes accessing apps like “Hamster Kombat” attractive.

The app is accessed through the messaging app Telegram, which remains popular in Iran despite efforts by the authorities trying to block access to it. It functions like an incremental or a “clicker” game — users repeatedly click on an object or complete repetitive tasks to earn points.

In “Hamster Kombat,” users believe they may be able to access a purported cryptocurrency associated with the game that’s still not traded publicly.

In an email, individuals describing themselves as the game’s developers declined to answer questions about their identities or business plans, but insisted they were “not offering any cryptocurrency in the game.”

“We are educating our audience about crypto through gaming mechanics,” the email claimed.

Still, the game resembles another app that did offer Iranians cryptocurrency in the past — and it seems that just the promise of what could be free money can drive some Iranians to distraction.

Jokes online show one man tapping on a gravestone as if it were a mobile phone. Another uses a massage gun to rapidly punch a hamster on the screen.

But the public’s fascination with the game has also drawn the attention of authorities.

Rear Adm. Habibollah Sayyari, the deputy chief of Iran’s military, described the app as part of the West’s “soft war” against Iran’s theocracy ahead of the election.

“One of the features of the soft war by the enemy is the ‘Hamster’ game,” Sayyari said, according to the state-run IRNA news agency. He theorized that the “enemy” is popularizing the game so that people would be distracted and not “pay attention to plans of presidential candidates.”

“Then (the people) fail to choose the best candidates,” Sayyari said. Hard-line pundits in Iran have voiced similar opinions.

The daily JameJam, published by Iran’s state television, also warned the ever-increasing interest in the game was a sign of “the dream of becoming rich overnight and gaining wealth without effort.” It said those playing range from “builders, mechanics and refrigerator repairmen to colleagues and classmates in university.”

“A society that instead of working and trying to succeed and earn money turns to such games and looks for shortcuts and windfalls gradually loses the culture of effort and entrepreneurship and moves towards convenience,” the newspaper said, without acknowledging that the country’s economic woes were potentially driving the interest in the app.

The app has even drawn the attention of a 97-year-old Shiite religious scholar, Ayatollah Nasser Makarem Shirazi, who is known for his fatwas declaring things “haram,” or “forbidden,” from his office in the holy city of Qom, Iran’s center of Shiite learning, packed with religious schools and revered shrines.

Calling cryptocurrency “the source of many abuses,” Shirazi said people shouldn’t use the “Hamster Kombat” app or others like it involving bitcoin.

Iran isn’t alone in having concerns about the game.

Authorities in Ukraine, locked in a devastating war with Iranian-armed Russia since Moscow’s 2022 invasion, warned that users’ data remains stored in Russia and could potentially put them at risk.

Then there’s the wider risk of malware exposure as consumers in Iran often cannot purchase new software legally or even access legitimate app stores. They also face the risk of state-sponsored hackers targeting them for their political views.

Meanwhile, as Iran’s election campaign goes on, presidential candidates are using Instagram, X and Telegram — all services previously banned by the theocracy after rounds of nationwide protests.

“As long as you are able to pay the price, everything is available,” said Rashidi, the Iran expert.

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Karimi reported from Tehran, Iran.

Jon Gambrell And Nasser Karimi, The Associated Press