Crypto Transactions in US-Sanctioned Countries Hit New Highs; Iran Leads the Way!

A recent report by Chainalysis has revealed a significant growth in cryptocurrency usage among countries under US sanctions, with Iran emerging as a frontrunner in this trend.

The report highlights that these nations experienced a substantial increase in crypto-related activities in 2024, receiving nearly $16 billion in digital assets over the past year. This figure accounts for approximately 39% of all illicit cryptocurrency transactions globally.

Crypto Transactions in US-Sanctioned Countries Hit New Highs

Iran has played a notable role in this uptick, with a marked rise in transactions related to sanctions. The report suggests that sanctioned countries are increasingly turning to cryptocurrencies and alternative financial systems to sustain trade and access capital.

Alternative Payment Mechanisms

Chainalysis’ analysis indicates that Western restrictions have prompted these countries to seek alternative methods. In this context, Russia and Iran, in collaboration with trading partners like China and India, are utilizing payment mechanisms that are not reliant on the US dollar.

Implications for Governments and Citizens

The report also points out that the use of cryptocurrencies in sanctioned countries may not only aid government financing but also serve as a means for ordinary citizens to preserve their wealth and circumvent limitations.

US Regulatory Actions

In the past year, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed 13 sanctions involving cryptocurrency addresses. Although this number is lower than the previous year, it remains at a relatively high level.

Potential Policy Shifts

With the re-election of Donald Trump and the appointment of Scott Bessent as Treasury Secretary, there is a possibility of changes in US policies regarding cryptocurrencies.

Tornado Cash and Illicit Transactions

The report also mentions the activities of Tornado Cash, a cryptocurrency mixer that was sanctioned by US authorities in 2023. Despite the sanctions, Tornado Cash continued to process hundreds of millions of dollars in transactions each month in 2024, although it has not yet returned to its pre-sanction activity levels. Notably, over 24% of the platform’s inputs in the past year were linked to stolen assets.

Iranian Exchange Usage on the Rise

Finally, Chainalysis emphasized that while the Iranian government maintains extensive control over the country’s financial system, including its cryptocurrency infrastructure, the growing use of Iranian exchanges indicates that more individuals and institutions are relying on cryptocurrencies to safeguard their assets and bypass restrictions.

Conclusion

The findings underscore the evolving landscape of global finance, where cryptocurrencies offer a viable alternative for nations and individuals facing economic sanctions. As geopolitical tensions and financial restrictions persist, the role of digital currencies is likely to become even more pronounced.