Sanctioned entities received $15.8 billion in crypto in 2024, accounting for 39% of all illicit crypto transactions, according to the 2025 Crypto Crime Report by blockchain analytics firm Chainalysis.

The report highlighted how increasing geopolitical tensions and financial restrictions drove nations like Iran and Russia to turn to digital assets to evade sanctions.

The US Treasury’s Office of Foreign Assets Control (OFAC) ramped up efforts to dismantle financial networks supporting sanctioned states, moving beyond targeting individuals to disrupting core financial infrastructures.

OFAC issued 13 designations involving crypto addresses, the second-highest total in the past seven years, despite a decrease in overall sanctions.

Iran’s reliance on crypto

Iran’s growing reliance on crypto was evident, with centralized exchanges (CEXs) in the country showing increased activity and capital outflows.

Outflows surged to $4.18 billion in 2024, up 70% year-over-year, as residents turned to digital assets amid the steep depreciation of the Iranian rial and inflation hovering around 40-50%.

The Iranian government’s abrupt halt of withdrawals from exchanges indicates its attempts to curb financial outflows. Many Iranians turned to crypto as a hedge against economic instability and to preserve wealth, often using digital assets to bypass government-imposed financial controls.

Meanwhile, in February, the Trump administration issued the National Security Presidential Memorandum (NSPM-2), reinstating the “maximum pressure” campaign on Iran.

The directive outlined aggressive measures for the US Department of Justice (DOJ) to target Iranian-linked financial networks and disrupt sanctions evasion activities. These measures included investigating Iranian financial networks, impounding illicit oil cargoes, seizing Iranian governmental assets, and prosecuting leaders of Iranian-funded terrorist groups.

Russia’s growing ecosystem

In Russia, lawmakers enacted legislation legalizing crypto mining and allowing digital assets for international payments to mitigate the economic strain of Western sanctions.

The policy shift aimed to ease financial pressure by enabling global trade through cryptocurrencies, and Russia strengthened ties with BRICS nations — Brazil, Russia, India, China, and South Africa — to explore alternative financial systems that bypass the US dollar.

Russia’s Central Bank has been driving efforts to integrate crypto into the country’s financial system under regulatory oversight, highlighting a significant departure from the country’s previous stance against digital assets.

Western agencies launched significant operations against Russian-linked crypto entities in 2024. On August 23, OFAC sanctioned Russian UAV developer KB Vostok OOO for soliciting crypto donations and likely facilitating drone sales to Russian forces in Ukraine.

The German Federal Criminal Police seized infrastructure from 47 no-KYC crypto exchanges involved in ransomware and darknet transactions on Sept. 19 as part of “Operation Final Exchange.”

Meanwhile, OFAC sanctioned Russia-based crypto exchange Cryptex and its operator, Sergey Sergeevich Ivanov, on Sept. 26 for laundering billions through fraud shops and darknet markets during “Operation Endgame.”

The crackdown continued on Dec. 4, when the UK’s National Crime Agency dismantled a Russian money laundering network in “Operation Destabilise,” leading to 84 arrests and the seizure of over €20 million in cash and crypto.

The post Crypto becomes lifeline for Iran and Russia amid Western sanctions – Chainalysis appeared first on CryptoSlate.