Sanctions and Cryptocurrency
How digital currencies create new pathways for sanctions evasion and new tools for enforcement.
The Crypto Evasion Landscape
Cryptocurrencies offer sanctioned actors something the traditional financial system cannot: the ability to move value across borders without passing through banks that screen for sanctioned parties. Russia, Iran, and North Korea have all explored cryptocurrency as a sanctions evasion tool. Iran has used Bitcoin mining, powered by its subsidized electricity, to generate hard currency outside the banking system. Russian entities have used stablecoins and decentralized exchanges for cross-border payments.
The scale of crypto-based evasion is growing but remains modest compared to traditional methods. Chainalysis estimated that sanctioned entities received roughly $14.9 billion in cryptocurrency in 2022, but this figure includes all transactions, not just evasion. The bulk of Russian sanctions evasion still flows through conventional channels -- intermediary countries, shadow fleets, and front companies. Cryptocurrency is a supplement to traditional evasion, not a replacement.