Some Nations Employ Crypto To Bypass Western Sanctions

“Iran, Russia, North Korea and other targets of sanctions have dramatically increased their use of virtual currencies to duck U.S. pressure, handling around $100 billion of crypto last year alone, firms that track the flows say.

 

They are also becoming more sophisticated in how they navigate the market, creating their own digital tokens and crypto exchanges to help process transactions, the firms and Western authorities say.

 

Iran and Russia have used virtual cash to buy drones and weapon parts, and Russia has used it to pay salaries for seafarers who smuggle their crude around the world, Western officials and crypto analytics firms say. North Korea, which has mastered the art of stealing crypto through hacks and other cybercrimes, has used it to buy fuel and military equipment, officials say.

 

Using crypto enables them to bypass traditional banks, which play a central role in policing sanctions imposed by the U.S. and others.

 

"Crypto has changed the sanctions-evasion game significantly," said Kaitlin Martin, a senior intelligence analyst at analytics firm Chainalysis. It estimates that cryptocurrency addresses linked to entities under sanctions received over $100 billion in 2025, almost eight times the amount received in 2024.

 

Russia considers international sanctions to be illegal under international law and has "deployed and developed alternative mechanisms that allow the economy to function normally," Kremlin spokesman Dmitry Peskov said.

 

North Korea recently called allegations that it engages in cybercrimes "absurd slander" and an extension of Washington's "hostile policy" toward Pyongyang. Tehran didn't reply to a request for comment.

 

Western officials are struggling to keep up as crypto becomes more popular for sanctions evasion. Although the U.S. has temporarily waived sanctions on Iranian oil as it negotiates a possible peace agreement with Tehran, it still considers sanctions to be a key tool to pressure adversaries worldwide. Washington is holding out the possibility of restoring oil sanctions on Iran if a peace deal isn't achieved.

 

In June, Washington imposed sanctions on four Iranian crypto exchanges, including its largest, Nobitex. Treasury Secretary Scott Bessent said the U.S. has seized $1 billion in crypto from Iran. Nobitex and another platform, Bitpin, denied they facilitate illegal activities and said their customers are ordinary people. The other two exchanges didn't reply to requests for comment.

 

In the U.K., authorities in May blacklisted one of the world's largest crypto exchanges on suspicion of supporting Russia's government. The exchange, HTX, said it would work with authorities to promptly address any concerns.

 

Getting a firm grip on the market is nearly impossible, because much of the industry isn't regulated, and transactions can be done anonymously.

 

The Iranian crypto platforms are only the most prominent nodes in a larger network, said Ari Redbord, head of policy at analytics firm TRM Labs, which monitors more than 100 Iranian crypto exchanges.

 

"Their takedown does not dismantle the architecture underneath them," he said. If anything, he said, the market is becoming harder to police.

 

"Over the last year, Iran and Russia have moved from one-off crypto transactions to building layered sanctions-evasion programs."

 

Unlike traditional money, which is usually linked to bank accounts, crypto transactions aren't easily identifiable. Digital wallets holding crypto are represented by numbers and letters, with no names attached. Anyone can create a wallet and hold or transfer crypto with minimal disclosure of where they got their funds.

 

Hamas, the U.S.-designated terrorist group and Iran ally, has asked for donations in crypto, according to the Federal Bureau of Investigation. Last year, an FBI agent came across one of the group's requests on Telegram, according to a court request filed by the FBI to seize the funds.

 

When a confidential source for the agent contacted the email provided, the source received instructions to visit a money-transfer office that converts traditional currencies into crypto, and then provide the teller with a wallet address where the money should be sent, the FBI said.

 

Eight wallets Hamas used for donations received $70,000 in cryptocurrency during a two-week period, the FBI agent said.

 

Hamas didn't respond to a request for comment.

 

In Iran, dozens of crypto exchanges have popped up in recent years, driven in part by demand from everyday citizens who need ways to transfer money and build savings amid a weakened rial and Western sanctions.

 

Iran's Islamic Revolutionary Guard Corps has used crypto exchanges to get paid for oil sales, particularly from China, its biggest customer.

 

The Wall Street Journal has reported how billions of dollars have moved through Binance, the world's largest crypto exchange, to networks financing the Revolutionary Guard. Binance has called the reporting inaccurate, adding that it didn't permit any transactions with individuals or digital wallets that were under sanctions at the time and that Binance took all appropriate actions once they were. The company filed a lawsuit against the Journal over its reporting. A Journal spokesperson said it stands by its reporting.

 

The Journal has also reported that CoinEx, an eight-year-old exchange founded by a Chinese engineer, has played a growing role in connecting Iran's crypto operations to the world as the country tries to evade sanctions. CoinEx said it doesn't "provide services to any sanctioned entity or individual" and has "never knowingly provided any form of facilitation to any party after it was designated."

 

Russia has also become more sophisticated in using crypto, Western authorities say, since the U.S. shut Russian banks off from the global financial system in response to the Ukraine conflict.

 

Last year, a company owned by Ilan Shor, a Moldovan oligarch under sanctions, and Promsvyazbank, a Russian state-owned bank hit with sanctions for its role in serving the country's defense sector, joined forces to create a token called A7A5, according to Western authorities and crypto-analytics firms.

 

The token is pegged to Russia's currency and can be used in its place. Users buy the token using rubles inside Russia and then change it to another cryptocurrency, such as the stablecoin Tether, which can be used internationally or converted into U.S. dollars.” [1]

 

1. Some Nations Employ Crypto To Bypass Western Sanctions. Kowsmann, Patricia.  Wall Street Journal, Eastern edition; New York, N.Y.. 06 July 2026: A1.