A recent Chainalysis report reveals that countries under U.S. sanctions accounted for 39% of illegal crypto transactions last year.
Here’s the gist: a new report from Chainalysis highlights a spike in crypto interest from nations facing U.S. sanctions. The firm also looked into the significant amount of stolen assets flowing through the mixing service Tornado Cash.
Sanctioned countries saw a massive rise in illicit crypto activities, with almost $16 billion in digital assets received last year, which is about 39% of all illegal token transactions, according to this Chainalysis report dropped on Wednesday.
In 2024, these nations, particularly Iran, outperformed individuals in terms of sanctions-related activities, as mentioned in the report.
The report states that as Western restrictions become stricter, these countries are turning to cryptocurrencies and alternative financial systems to maintain trade and secure capital. It pointed out financial dealings between Russia and Iran with trade partners like China and India, using payment methods that don’t depend on U.S. dollars.
Interestingly, while using cryptocurrencies in these sanctioned areas might be linked to illegal state-controlled finances, it’s also a crucial financial support for regular folks struggling economically under oppressive regimes.
Now it seems we are going to face a two edged sword. Trump's administration is undoubtedly pro Bitcoin, but if his presumed enemies keep trooping into bitcoin to evade the consequences of their fall out with Trump, I'm afraid that Trump could make a U-Turn and rise against bitcoin. This is a situation we don't wish to have .
Note that it does NOT specifically call out BTC as one of them (though no doubt some is). With Bitcoin being an open ledger it is a terrible coin for them to use. Odds are most of the illicit national activity is in privacy coins like Monero that cannot be traced.
And if I may add, worst though is the North Koreans, who have their own state sponsored hackers, the Lazarus group.
So this is one case that it's very different, there could be countries like Iran who uses crypto to evade sanctions. But North Korean is different, not just to evade, but they are stealing crypto and hacking most of the exchanges specially from their counterpart of South Korea.
Well, It seems his administration will be less strict on crypto than Bidens, but even if he makes a U-turn, Bitcoin is bigger than one man. Though, I don't see this happening because of the memecoin he recently launched and also I think he will keep his promise of having Bitcoin as a strategic national reserve. One way or the other, he's going to come up with something to punish these nations but I don't expect him to go anti crypto.
There was no way we could have avoided this type situation.
It is crypto, an alternative currency which people and entities would use as an option to avoid many things. It has its pros and this is one of the cons.
Countries will use Bitcoin, I know they will..Not for this type of situation but for good. By the way, I think if Iran uses Bitcoin, it can still be traced and the receipts punished.
Yea, I was just speculating and I know it is too early for Trump to make a U-turn about bitcoin for whatever reasons. The dream is big and the people Trump surrounds himself with are also pro bitcoiners or atleast not people who thinks bitcoin is a Ponzi scheme. For US government to embrace bitcoin, I believe their have put in place to manage the excess of bitcoin or bitcoin users. With fine regulations, things might not be difficult to handle.
Correct, for now we have heard that they are the one who attack Bybit, $1.5 billion, that is a huge money to begin with and we only wish that North Korea, if they got their hands on this money are not going to buy weapons but instead him their population.
And their attempt is getting bolder, they don't just attack for just a couple of dollars, it's millions and this one is the biggest heist in crypto history. And so with this, it's obvious that the sanctions are two edge sword. Crypto exchanges are the target from the Lazarus group of North Koreans and there are no stopping them.
So the sensorship resistance feature of Bitcoin is proving itself useful for the countries facing US sanctions. Great to know that! While not all countries under such sanctions are bad, but there are definitely some dengerous countries in the list like North Korea. Unfortunately, there's no way to effectively stop them from using Bitcoin.
As Kemarit correctly pointed out, North Koreans are getting bolder day by day and increasing their span of attacks. The latest hack of Bybit is one of the prime examples here. If Bitcoin was centralized, these wouldn't have happened. But unfortunately that's one of the downsides of being anonymous and decentralized.
That's a very good news, "unfortunately" for cryptocurrencies if Trump's administration normalize its commercial and financial relations with sanctioned countries like Russia, Bitcoin and other cryptocurrencies price could go down. I don't know if it is what is happening now but prices are falling since US are trying to end the Russian-Ukrainian conflict and coming next to Russia.
It is easy to understand why, they can use crypto to evade sanctions and facilitate trade with other nations that are still willing to trade with them. I don't understand the part of 'stolen funds', are they involved in illicit activities, or are they just using crypto and the U.S. do not like it because they sanctioned them.
Trump didn't like BTC when he was president the first time. Not that i'm sure he cares about BTC now.
They are certainly called illicit transactions because they are just not allowed by US. But even if US disagree with that they can't do anything because there are no bank and people involved in the transactions likely to be sued or sanctionned by US administration. Coward bankers are not needed for doing international trade anymore even at a state level, that's a very good news. If Trump still doesn't care about Bitcoin and cryptocurrencies as you say he should be careful because many people voted for him precisely for this purpose.
They make it sound like 'stolen funds', like the countries are into something 'illegal', they are only somehow evading U.S. sanctions and if i understood correctly, that is the only 'wrong' they have done. This is the same way the government label some bitcoins as dirty, but we bitcoiners know that is nonsense, there is no dirty or clean BTC, all we have is BTC and the government just does things like this to attack BTC's fungibility.
It is true that these transactions are illegal in the eyes of the US government, but they are completely legitimate in the eyes of countries targeted by US sanctions such as Russia and Iran, as well as citizens residing in these banned countries.
I personally live in a country banned by the United States. Before the existence of Bitcoin and cryptocurrencies, I had no hope of bypassing the US ban on any financial transfer, but today I can do it with ease.
Therefore, I expect that the more the US ban increases, the more people and countries will use cryptocurrencies.
They say the reason is the Bybit hack and then the fresh tariffs imposed by the Trump administration. Nevertheless yesterday the price goes up to $95,000 but it was short lived.
And that's why prior to Trump assuming the office, we have heard a lot of countries using Bitcoin and crypto to evade the ban. But now, it seems that Trump has change his stance and even wanted Bitcoin and others to be their Strategic reserve.
With that, many countries are going into crypto regardless if the want to evade sanction or not.
It makes a lot of sense. Why would they miss the opportunity to play a role if Trump says he is determined to make The United States the capital of Cryptocurrencies? If a lot of interest is brought to the Cryptocurrency markets, it would be really stupid for other countries to miss on riding the same train.
Even if Trump did not announce or start providing support for Cryptocurrencies, it still makes sense. They were sanctioned and limited internationally. What, did everybody expect Iran, North Korea, Russia and the likes to lay back and say 'screw it, guess we can do nothing now'? It makes sense that they will start looking for alternatives to still continue trading internationally while avoiding sanctions successfully. Bitcoin is the best for that. I guess Decentralization comes with a few caveats too.
Though I would mention this is only negatively quoted in the situation presented here. Had a dictator taken a country over and the finances of private citizens too, Bitcoin would do miracles allowing the victims of the dictator to disobey through a Decentralized system. I suppose it is about circumstances and no matter how limited a system is, there will ALWAYS be negative sides anyway. So who cares. I rather have access to a Decentralized system that brings me peace than an overly restricted and censored Centralized system that analyzes me and asks questions I find annoying and deeply invasive or disturbing.
I can be a great example of this, as I live in a country that is ruled by a dictatorship on one hand and on the other hand my country is banned by the United States.
So Bitcoin has provided me with a great solution through its decentralization to get rid of both sides, with Bitcoin I can evade the ban imposed on my country by the United States on the other hand I can get rid of the censorship imposed by the government here in my country.
Long live Bitcoin forever.