Hundreds of millions of dollars flow through illicit crypto exchanges each year, bypassing traditional financial restrictions.
According to Chainalysis experts: sanctioned entities, ranging from Russian banks to North Korean cybercriminals are leveraging cryptocurrency to evade financial controls, fund illicit operations, and facilitate cross-border transactions without regulatory oversight.
In a recent episode of the Public Key podcast, Eitan Danon and Andrew Fierman, national security analysts at Chainalysis, discussed the growing use of crypto by sanctioned regimes.
They highlighted the role of blockchain technology in sanctions enforcement and the ways illicit actors exploit its pseudonymity to obscure transactions. With the upcoming release of the Chainalysis 2025 Crypto Crime Report, new data sheds light on how groups like Hamas, Russian financial institutions, and North Korean hackers are weaponizing crypto to evade restrictions and move funds across borders.
Russia, Iran, North Korea, and China: A Strategic Alliance in Crypto
The use of crypto for sanctions evasion is not isolated, it is part of a growing network of state-backed financial maneuvering. Fierman pointed to legislative changes in Russia that now permit cross-border transactions via cryptocurrency. This shift allows Russian companies and individuals to move funds outside the reach of U.S. and European financial restrictions, often using Russian-language instant exchange platforms.
“These platforms don’t require KYC (Know Your Customer) information and allow transactions to be made anonymously,” Fierman explained. “They serve as a direct conduit for sanctioned Russian banks and institutions to move rubles into cryptocurrency, bypassing traditional financial oversight.”
Chainalysis has identified that these Russian-language instant exchanges process hundreds of millions of dollars annually. Similar tactics are employed by Iranian entities seeking to circumvent U.S. secondary sanctions, while North Korea continues to rely on cyber theft and crypto laundering to fund its weapons programs.
The Role of Crypto in Terrorist Financing and Black Market Transactions
Beyond nation-state actors, terrorist organizations and criminal enterprises are increasingly adopting crypto to finance operations. Fierman pointed to Hamas’ reliance on crypto donations before the group ceased fundraising efforts due to law enforcement crackdowns.
One notable case involves an Iranian-backed financier, Saeed al-Jamal, who facilitated over $300 million in transactions using crypto to evade international scrutiny. His network highlights the ability of bad actors to move large sums using decentralized financial tools, circumventing banking systems that would otherwise flag and block such activities.
“We’re not just seeing cybercriminals using crypto, we’re seeing full-scale professionalization of illicit finance within the ecosystem,” Fierman noted. “From organized crime to state-backed economic maneuvering, crypto is becoming a central tool.”
