Illicit activity in the cryptocurrency space is nothing new, but in recent months nation-states have taken an increasingly larger role in it. According to a new section of Chainaanalysis’ Cryptocurrency Crime Report, sanctioned entities including Russia and Iran received a 694% increase in cryptocurrencies last year.
The report details the evolution of cryptocurrency crime over time. In the past, the illicit use of cryptocurrencies has mainly involved individual traders exchanging hundreds of thousands or millions of dollars. Now, nation-states are beginning to dominate the space, diverting hundreds of millions or even billions of funds obtained through hacking or fraud.
“While nation states have been using cryptocurrencies for some time, the scale today is different,” said Andrew Fierman, director of national security intelligence at Chainaanalysis, a private company that helps government agencies and cryptocurrency companies identify illegal activity.
The report comes as rumors swirl about the incident. Cryptoassets Another country vulnerable to sanctions – Venezuela. While the South American country was not named in the report, it has a long history with cryptocurrencies. Firman said citizens have been using it as a way to offset hyperinflation in their own currencies.
As for Russia, the country has made several on-chain initiatives over the past few years. In response to Western sanctions, it introduced legislation in 2024 to allow the use of cryptocurrencies for international payments. The country then launched the ruble-backed A7A5 token in February 2025, with transaction volume of approximately $93 billion in less than a year.
Iran has achieved similar results with its use of cryptocurrencies. The country’s Islamic Revolutionary Guard Corps and its network of agents facilitated more than $2 billion in money laundering, illicit oil sales and on-chain weapons procurement. Terrorist groups aligned with Iran, including Lebanese Hezbollah, Hamas and the Houthis, are using cryptocurrencies on an unprecedented scale, the report said.
The vast majority of cryptocurrency crime occurs in the form of stablecoins, which account for 84% of all illegal transaction volume. This reflects a broader trend in blockchain – people are increasingly using stablecoins because they make international payments easier and less volatile.
The report states that the broader crypto economy consists primarily of legitimate transactions. The illicit share of all cryptocurrency trading volume increased slightly from last year, but remains below 1%.