TRM Labs Reports on Nation-State Use of Cryptocurrency for Sanctions Evasion and Strategic Operations
TRM Labs highlights the emerging role of cryptocurrency as a geopolitical tool used by nation-states to evade sanctions and support various strategic activities, including ransomware operations.
North Korea stands out as the most prominent example, with its cyber divisions reportedly stealing billions of dollars from cryptocurrency exchanges, DeFi protocols, and cross-chain bridges over the past five years. Notably, the Bybit hack in February 2025 involved approximately $1.4 billion.
Chainalysis data from December 2025 reveals that the DPRK stole at least $2.02 billion in 2025 alone, marking a 51% increase from 2024. These activities bring the estimated total of DPRK-linked crypto theft to about $6.75 billion, accounting for 76% of service compromises in 2025.
The stolen funds are laundered using mixers and privacy tools, transferred across multiple blockchains, converted into stablecoins, and cashed out through over-the-counter brokers and foreign exchanges, primarily in Asia.
Russia and Iran are also exploring crypto-based trade methods to circumvent U.S. dollar sanctions. Russia has utilized cryptocurrency to facilitate oil trades with China and India, while pro-Russian groups have mobilized digital assets to support military-linked causes.
Iran, having legalized Bitcoin mining in 2019, contributes domestically mined BTC to the global hash rate, which is then sold to the central bank and used in sanctioned trade via regional intermediaries.
In Venezuela, the weakening economy and devaluation of the bolívar have driven broader stablecoin adoption for everyday payments.
Regulators across the U.S., Europe, Japan, and Singapore are increasingly employing blockchain analytics to strengthen sanctions enforcement. Collaborative initiatives like the T3 Financial Crime Unit have successfully frozen over $300 million in criminal assets.
Overall, this situation is framed as a "Blockchain Cold War," where cryptocurrency is reshaping global power dynamics and governance structures.
