Iran, Russia, North Korea and other countries on the U.S. blacklist are actively using cryptocurrency as a means to evade sanctions, according to a report.
Cryptocurrency addresses linked to sanctioned entities received more than $100 billion (about 153 trillion won) last year, according to blockchain analytics firm Chainalysis, as reported by The Wall Street Journal on Wednesday. The figure is nearly eight times higher than the previous year.
Analysts say sanctioned countries frequently use cryptocurrency because it is difficult to verify the identities of transaction parties and it can bypass the traditional banking system, a cornerstone of Western sanctions.
Hamas, the Palestinian militant group designated as a terrorist organization by the United States, has also been found to solicit cryptocurrency donations. Hamas posted cryptocurrency donation instructions on platforms including Telegram, and the U.S. Federal Bureau of Investigation (FBI) confirmed through informants the specific methods by which they receive donations.
Iran's Islamic Revolutionary Guard Corps (IRGC) is known to have used domestic and foreign cryptocurrency exchanges to receive payments for crude oil sales to China, its largest crude buyer.
Russia has also advanced its use of cryptocurrency to evade sanctions after being excluded from the international financial network following the war in Ukraine. Promsvyazbank, a sanctioned Russian state-owned bank, and Moldovan-born oligarch Ilan Shor issued a ruble-pegged token called "A7A5" last year and used it for overseas payments. Russia is also known to use cryptocurrency to pay the wages of crew members who smuggle sanctioned crude oil around the world.
Western authorities believe North Korea has used cryptocurrency stolen through cybercrime such as hacking to purchase fuel and military equipment. Blockchain analytics firm TRM Labs recently said that about two-thirds of the global cryptocurrency hacking losses in the first half of this year are estimated to be the work of North Korea-linked hacking groups.
Amid this situation, the United States has strengthened its crackdown in recent years by seizing cryptocurrency wallets used by sanctioned countries and terrorist organizations and by sanctioning exchanges. Last month, it sanctioned four Iranian exchanges, including Iran's largest exchange Nobitex, and Treasury Secretary Scott Bessent said the United States seized $1 billion worth of cryptocurrency from Iran.
However, experts point out that it is not easy for sanctioning authorities to block all of this, given that the cryptocurrency ecosystem is changing rapidly and regulatory levels vary between countries. Ari Redbord, head of policy at TRM Labs, said, "The Iranian cryptocurrency platforms recently sanctioned by the United States are merely the most visible outposts," adding, "Bringing them down does not dismantle the structure beneath them."
