Crypto is becoming a vital tool for sanctioned nations like Iran and Russia as Western financial restrictions tighten. According to the latest 2025 Crypto Crime Report by Chainalysis, these countries received $15.8 billion in crypto during 2024, representing 39% of all illicit crypto transactions globally.
Iran Turns to Digital Assets
Iran is increasingly relying on cryptocurrencies to weather its economic challenges. In 2024, capital outflows through centralized exchanges soared to $4.18 billion, a sharp 70% increase from the previous year. The Iranian rial continues to lose value, with inflation stuck at 40-50%, forcing citizens to find alternative ways to preserve their wealth.
Many Iranians now use crypto to bypass government-imposed financial controls. However, the government is trying to stem the outflow of capital, recently halting withdrawals from local crypto exchanges.
The situation worsened in February when the U.S. doubled down on its “maximum pressure” campaign against Iran. A presidential directive, NSPM-2, authorized aggressive measures, including impounding Iranian assets and targeting financial networks tied to sanctions evasion.
Russia Leans on Crypto Mining and Trade
In Russia, crypto is playing a key role in countering Western sanctions. Lawmakers legalized crypto mining and allowed digital assets for cross-border payments, providing the country with an alternative financial channel. The move is part of a broader strategy to reduce dependency on the U.S. dollar and strengthen ties with BRICS nations.
Russia’s Central Bank is now actively working to integrate crypto into the national economy under regulatory oversight. This marks a major policy reversal, as the country once held a hardline stance against cryptocurrencies.
Western Crackdowns Intensify
Despite their efforts, Iran and Russia face growing resistance from Western agencies. In 2024, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) issued 13 crypto-related sanctions, the second-highest total in seven years.
Russia, in particular, has been a key target. OFAC sanctioned Russian crypto entities tied to drone sales and darknet markets. In September, German authorities dismantled 47 no-KYC crypto exchanges in “Operation Final Exchange.” The UK’s National Crime Agency followed suit in December, seizing over €20 million in crypto and arresting 84 individuals in “Operation Destabilise.”
A Widening Global Divide
As geopolitical tensions rise, crypto is emerging as a double-edged sword. For countries like Iran and Russia, it offers a way to survive under sanctions. For Western governments, it’s a growing battleground in the fight against illicit financial networks. The divide is widening, and the stakes are higher than ever.
