Countries targeted by US government’s sanctions have risen in illegal crypto activity and received almost $ 16 billion in digital assets last year – approx. 39% of illegal token transactions – according to a report from chainalysis released Wednesday.
2024 was a year in which these nations-Iran Iran-roast over individuals in sanctions-related activity, the report from the crypto-analytics company noted.
“When Western restrictions are tightened, sanctioned nations turn to cryptocurrencies and alternative financial systems to maintain trade and access capital,” according to the report, cited Russian and Iranian financial transactions with trading partners such as China and India, using payment mechanisms, such as Don Don Don Not on US dollars.
“Although the use of cryptocurrency in sanctioned jurisdictions may be associated with illegal state -controlled funding, it also represents an important economic lifeline for ordinary citizens facing financial difficulty under restrictive regimes,” the report said.
The US Treasury for Foreign Asset Control or Ofac is the government arm that sets sanctions, and last year issued the 13th that included crypto addresses. It was down from the year before, but still high. Now that President Donald Trump has taken over the executive branch and installed Scott Bessent on top of the Treasury, Pro-Crypto administration can take another approach to digital assets.
Crypto-blend platform Tornado Cash was famous for US authorities by 2023, but the popular service was still able to handle hundreds of millions of dollars in crypto-transactions a month in 2024, the report said, though it has not returned to its Pre-sanction level.
Such services are criticized for their use in the laundering of stolen funds or for avoiding sanctions, and they are difficult to shut down because they operate via smart contracts on a decentralized blockchain. Users pushing stolen funds accounted for an increase in Tornado Cash’s use in 2024, corresponding to more than 24% of its total influx, according to chainalysis.
Tornado Cash has come to represent the industry’s legal struggle with the US government on user anonymity, and whether developers must be responsible for what they create, and an American federal appeal law rejected the original sanctions in November.
Chainalysis devoted care to Iran in its latest report.
“Iran’s government maintains extensive control over the country’s financial system, including cryptocurrency infrastructure,” the document noted. “For many Iranians, Cryptocurrency represents an alternative financial system, and the rising use of Iranian crypto exchanges suggests that several individuals and institutions are bulled to crypto to protect wealth and bypass financial restrictions.”
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