In 2024, sanctioned entities received a staggering $15.8 billion in cryptocurrency, making up 39% of all illicit crypto transactions, as revealed in the 2025 Crypto Crime Report by Chainalysis, a leading blockchain analytics firm. The report shed light on how escalating geopolitical tensions and financial restrictions pushed countries like Iran and Russia to turn to digital assets in order to evade sanctions.
The US Treasury’s Office of Foreign Assets Control (OFAC) intensified its efforts to dismantle financial networks supporting sanctioned states, going beyond targeting individuals to disrupting core financial infrastructures. In fact, OFAC issued 13 designations involving crypto addresses, the second-highest total in the past seven years, despite an overall decrease in sanctions.
Iran emerged as a key player in the crypto space, with centralized exchanges (CEXs) in the country witnessing a surge in activity and capital outflows. In 2024, outflows reached $4.18 billion, marking a 70% year-over-year increase. This spike can be attributed to the steep depreciation of the Iranian rial and inflation rates ranging from 40-50%. Many Iranian residents turned to cryptocurrencies as a means of hedging against economic instability and circumventing government-imposed financial controls.
On the other hand, Russia took steps to legitimize crypto mining and enable the use of digital assets for international payments as a response to Western sanctions. This move aimed to alleviate financial pressure by facilitating global trade through cryptocurrencies. Additionally, Russia forged stronger ties with BRICS nations to explore alternative financial systems that reduce reliance on the US dollar.
Despite these efforts, Western agencies launched major operations against Russian-linked crypto entities in 2024. Notably, OFAC sanctioned Russian UAV developer KB Vostok OOO for engaging in crypto donations and potentially facilitating drone sales to Russian forces in Ukraine. The German Federal Criminal Police dismantled infrastructure from 47 no-KYC crypto exchanges involved in ransomware and darknet transactions as part of “Operation Final Exchange.” Furthermore, OFAC targeted Russia-based crypto exchange Cryptex and its operator for laundering billions through fraudulent activities during “Operation Endgame.”
The crackdown continued with the UK’s National Crime Agency disrupting a Russian money laundering network in “Operation Destabilise,” resulting in 84 arrests and the seizure of over €20 million in cash and cryptocurrency.
The landscape of illicit crypto transactions involving sanctioned entities is constantly evolving, and regulatory bodies are ramping up efforts to combat these activities. Stay tuned for further developments in the crypto crime space.