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Sanctioned entities moved $104 billion in cryptocurrency throughout 2025, a 694% surge that reflects how nation-states have integrated digital assets into their national financial infrastructure to circumvent economic pressure.
The finding comes from Chainalysis's 2026 Crypto Crime Report, which identifies sanctions evasion as the dominant driver of illicit crypto activity. Total illicit transaction volume reached $154 billion last year, driven almost entirely by state-linked actors seeking to maintain access to global markets despite international restrictions.
Russia's ruble-backed A7A5 stablecoin exemplifies the shift. Launched in mid-2024, it processed $93.3 billion in transactions within less than a year, functioning as a dedicated settlement system for sanctioned Russian businesses and entities. The European Union and US have since sanctioned cryptocurrency exchanges tied to the stablecoin's operation, but the sheer volume demonstrates how extensively nation-states now rely on blockchain infrastructure for trade.
Iran's approach is more operationally sophisticated. The Islamic Revolutionary Guard Corps (IRGC) and its proxy networks accounted for over half of all value received by Iranian entities in the fourth quarter of 2025, with total transfers reaching $3 billion for the year, the report said.
The IRGC uses cryptocurrency to finance regional militia networks including Hezbollah, Hamas, and the Houthis, and to facilitate arms and oil sales. Chainalysis found that major geopolitical events, including February's US-Israel strikes on Iran and the June 2025 war, triggered measurable spikes in onchain activity, suggesting blockchain transactions serve as real-time indicators of state resource flows during crises.
North Korea recorded its most successful theft year ever, stealing over $2 billion in cryptocurrency in 2025. The regime routes stolen funds to support weapons development and finances IT operations embedded globally to generate additional revenue.
The data reveal a strategic shift in sanctions evasion tactics. Rather than relying solely on shell companies and hidden bank accounts, nation-states now operate industrial-scale cryptocurrency infrastructure. Stablecoins – digital currencies pegged to real-world assets like the ruble or dollar – have become the critical bridge, enabling cross-border transactions that legacy financial systems can no longer facilitate.
The proliferation of state-backed crypto activity complicates enforcement efforts. Regulatory bodies including the US Treasury Department, European Union, and UK have coordinated sanctions actions against crypto exchanges, stablecoin platforms, and money laundering networks tied to sanctioned nations. But the 694% increase in flows suggests current enforcement has not disrupted the underlying architecture.
Chainalysis also found that Southeast Asian scam networks operate alongside state-linked activity. The Prince Group and its CEO, Chen Zhi, were sanctioned in 2025 for facilitating "pig butchering" scams – romance-based fraud schemes that funnel victims' money through cryptocurrency networks.
