Does bleeding caused by the IUD mean that one cannot pray?

Firstly: 

The basic principle concerning the blood that comes from the woman is that it is menstrual blood, so long as the bleeding has not lasted for longer than fifteen days, after which it is istihaadah (non-menstrual vaginal bleeding) according to the majority of fuqaha’. According to some, it is menstrual blood so long as it has not lasted for longer than one month, after which it becomes istihaadah. 

Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) said: 

If the strength of the opinion that there is no minimum or maximum limit for menses is established and it becomes clear that this is more correct view, then it should be noted that every time the woman sees natural blood for which there is no cause such as an injury and the like, then it is menstrual blood, without specifying a particular time frame or age, unless it is ongoing and never stops, or it stops for a short time such as one or two days in the month, in which case it is istihaadah. … Shaykh al-Islam Ibn Taymiyah said: The basic principle concerning everything that comes out of the womb is that it is menses, unless there is evidence to show that it is istihaadah. He also said: Whatever happens of bleeding is menses, so long as it is not known whether it is bleeding from a vein or an injury. Just as this opinion is the stronger one in terms of evidence, it is also easier to understand and to act upon and apply, than what those who put a time limit on it suggested..

End quote from Risaalah min ad-Dima’ at-Tabee‘iyyah li’n-Nisa’

Secondly: 

The length of the period may increase and decrease, and it may come earlier or later. The blood that comes out in these cases is deemed to be menstrual blood. A woman’s period may usually be seven days, but it may last as long as ten days, for example. Thus the ruling in both cases is that it is menstrual blood.  

Thirdly: 

Insertion of an IUD usually causes disruption in the menstrual cycle, making it longer or causing it to come earlier or changing the nature of the menstrual blood. 

Based on that: 

The blood that you are seeing is menstrual blood and it is not acceptable to pray and fast at this time, even if it lasts longer than the usual period, so long as it does not last longer than fifteen days according to the majority view, and does not last longer than a month according to the other view, after which it becomes istihaadah. If it lasts less than fifteen days, it is menstrual bleeding. 

The view that the bleeding that occurs with the IUD is not menstrual blood at all is an opinion for which there is no basis. 

Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked: There is a woman who had an IUD inserted. Before that procedure her period was seven days, but after that her period increased to ten days. Please note that on the seventh day the bleeding decreases, then on the eighth and ninth day the bleeding gets worse, then it stops after the tenth day. 

He said: She should carry on until she becomes pure. 

Questioner: Is it part of her period? 

Shaykh: Because this IUD changes the period, because it restricts the flow of the blood out of the uterus, and the blood flows more slowly, so the period becomes longer.

End quote from al-Liqa’ al-Maftooh, 227/27. 

And Allah knows best.