Iran’s Islamic Revolutionary Guard Corps utilized more than $2 billion in cryptocurrency transactions in 2025 to circumvent sanctions and support cybercriminal activities, according to Chainalysis. This statistic only considers U.S. sanctions designations, suggesting the actual amount could be higher. The development underscores a sharp increase in illicit cryptocurrency usage, fueled by sanctions on countries such as Russia and North Korea.
In 2025, crypto crime surged dramatically. Data from Chainalysis reveals illicit cryptocurrency transactions spiked by 162% from the previous year, amounting to at least $154 billion. Countries under sanctions have increasingly turned to cryptocurrencies to bypass financial restrictions. Iran, in particular, has seen affiliated proxy groups and entities labeled as terrorist organizations, including Hezbollah, Hamas, and the Houthis, using digital currencies for fund transfers and cashing out.
Iran is not alone in experiencing a rise in illicit crypto activities. Chainalysis reports that Russia recorded the largest share of such activities, particularly after introducing the ruble-pegged A7A5 token. Transactions related to this new stablecoin reached around $93 billion, contributing significantly to the surge in crypto activity among sanctioned entities.
North Korean hackers have long been a significant presence in the cyber threat landscape. In 2025, they reached a peak in terms of both the value of stolen cryptocurrency and the sophistication of their methods. Hackers linked to North Korea were responsible for approximately $2 billion in stolen funds during this period. China also added an unexpected dynamic to the landscape, further complicating the situation.
The Chainalysis report published on Thursday highlighted the emergence of Chinese money laundering networks (CMLNs) as a dominant force in 2025. These networks have accelerated the diversification and professionalization of on-chain crime, offering services such as laundering-as-a-service and supporting criminal infrastructure. Building on models like Huione Guarantee, these networks have become full-service criminal operations, aiding fraud, scams, North Korean hacking proceeds, sanctions evasion, and terrorist financing.
Beyond the role of crypto in facilitating illicit activity, the report emphasized a growing link between digital assets and violent crime. Physical attacks on bitcoin holders increased by 33% in 2025, while violent crypto robberies and kidnappings surged by 169%. Many attacks began with the public exposure of wallet details, without the need for hackers to breach wallets.
Chainalysis highlighted the increasing connections between on-chain activities and human trafficking operations, as well as attacks involving physical coercion. Although the firm noted that illicit transactions remain a small portion of total crypto activities, the urgency in protecting the ecosystem’s security and integrity is more pressing than ever.
Bitcoin, as the largest cryptocurrency by market value, plays a crucial role in this landscape. It is often used for illicit transactions due to its widespread acceptance and the relative anonymity it offers. Meanwhile, Solana, a smart-contract network popular for various applications, also features in these activities, highlighting the diverse use of different blockchain technologies in illicit operations.
Regulators typically focus on several key areas to address these challenges. These include ensuring market integrity, implementing surveillance-sharing agreements, maintaining robust custody solutions, and providing clear disclosures for investor protection. Regulatory bodies aim to preserve the integrity of financial systems while preventing misuse of cryptocurrencies.
As institutional interest in cryptocurrencies grows, large banks and asset managers are exploring crypto products to satisfy client demand, offer new fee-generating services, and provide alternative access routes to digital assets. This trend highlights the increasing mainstream acceptance of cryptocurrencies, despite ongoing concerns about their use in illicit activities.
The competitive landscape for cryptocurrency products is dynamic, with multiple issuers often filing similar offerings. Timelines for regulatory review can be uncertain, and amendments to proposals are common. These factors add complexity to the process of launching new crypto-based financial products.
Looking ahead, key stakeholders are monitoring a range of developments. These include potential regulatory amendments, requests for public comment, and decisions on approvals or denials. The ongoing evolution of the regulatory environment and market conditions will be critical in shaping the future of cryptocurrency use and its associated risks.
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