Iran’s Surge in Cryptocurrency Engagement
A recent analysis by Chainalysis reveals that Iran’s engagement with cryptocurrency has surged dramatically, particularly in relation to its military apparatus, with over $3 billion funneled through networks associated with the Islamic Revolutionary Guard Corps (IRGC) in 2025. The findings come from the firm’s 2026 Crypto Crime Report, which indicates that illicit cryptocurrency wallets received upwards of $154 billion in digital assets last year alone, marking a staggering 162% increase compared to the previous year.
Strategic Use of Cryptocurrencies
Chainalysis points out that despite facing significant internal dissent and external sanctions—challenges reminiscent of its early years—the Iranian government has strategically elevated its use of cryptocurrencies to fund various proxy militias. The report notes that in the last quarter of 2025, addresses linked to the IRGC represented more than half of all incoming cryptocurrency value to Iranian entities, facilitating oil sales, supporting militia networks, and acquiring dual-use technologies.
Geopolitical Tensions and Market Reactions
Heightened tensions in the region were underscored last weekend when U.S. and Israeli airstrikes led to an observable spike in cryptocurrency outflows from Iranian exchanges, peaking at around $10.3 million, with hourly amounts nearing $2 million. This geopolitical event initially caused Bitcoin’s value to drop to $63,100, though it quickly rebounded to the $70,000 mark as traders recalibrated their projections regarding future conflicts. By mid-week, Bitcoin nearly reached $74,000 before settling just above $71,000.
Broader Trends in Illicit Cryptocurrency Use
The comprehensive Iranian cryptocurrency market was valued at $7.48 billion in 2025. Chainalysis emphasizes that a significant objective driving these funds is the sustained support of militias in the vicinity, with Iranian financial activities notably aiding groups such as Hezbollah and Hamas, facilitating the transfer of commodities, illicit oil, and arms on an unprecedented scale.
The trend of illicit cryptocurrency use stretches far beyond Iran, as Chainalysis estimates that sanctioned nations collectively accounted for $104 billion in crypto flows out of the total $154 billion in illicit transactions recorded in 2025. Russia features prominently in this landscape, with the A7A5 stablecoin facilitating an astonishing $93.3 billion in illicit transactions within less than a year. Sanctioned Russian exchanges, specifically Grinex and Meer, reported transaction volumes of $305 million and $4.76 billion, respectively, during the same period.
Other Notable Players in Cryptocurrency
Venezuela has also emerged as a significant player in cryptocurrency, with fiscal transactions reaching $44.6 billion in 2025 as locals sought refuge in digital assets amidst hyperinflation and political upheaval. The report notes the pivotal role of informal over-the-counter (OTC) brokers in enabling Venezuelan nationals to swap local currency for cryptocurrencies, even at sanctioned banks.
Meanwhile, North Korea continues to be a major contributor to illicit cryptocurrency activities, with estimates indicating that hackers affiliated with the regime appropriated over $2 billion worth of crypto in 2025, marking an unprecedented high for the nation in terms of crypto theft. The report also outlines significant money laundering and fraudulent cryptocurrency movements in Southeast Asia, particularly through the sanctioned Huione Group, which processed more than $98 billion between August 2021 and January 2025.
