Sanctioned Nations Turn to Cryptocurrencies to Bypass Financial Restrictions

Nations subject to US sanctions are increasingly turning to cryptocurrencies as a way to circumvent financial restrictions. Firms that track cryptocurrency flows report that Iran, Russia, North Korea, and others have handled around $100 billion worth of virtual currencies last year alone.

These nations have become more sophisticated in navigating the market, creating their own digital tokens and crypto exchanges to process transactions, according to Western authorities and analytics firms. They use cryptocurrencies to buy goods and services that would otherwise be restricted by sanctions.

Iran and Russia have utilized virtual cash to purchase drones and weapon parts, while Russia has also used it to pay salaries for seafarers who smuggle sanctioned crude around the world, according to Western officials and crypto analytics firms. North Korea, which has mastered the art of stealing cryptocurrencies through hacks and other cybercrimes, has used them to buy fuel and military equipment.

Using cryptocurrencies allows these nations to bypass traditional banks, which play a central role in policing sanctions imposed by the US and others.