The Chainalysis 2026 Crypto Crime Report paints a picture of states increasingly turning to crypto to evade sanctions. Syed Rahman and Ulrich Schmidt assess the report’s most notable findings.
2025 was the year, according to Chainalysis, when crypto-related crime hit a record high.
The Chainalysis 2026 Crypto Crime Report cites a rise in crypto activity by nation states who either look to use existing illegal on-chain organisations or create their own in order to evade restrictions imposed by sanctions.
As a result, Chainalysis believes that “government agencies and compliance and security teams now face significantly higher stakes on both the consumer protection and national security fronts’’. Its report says that illicit cryptocurrency addresses received at least $154 billion in 2025. This is a 162% rise on the previous year and is due largely to a 694% increase in the value of what was received in this way by sanctioned entities.
Russia’s efforts to use crypto to evade sanctions saw the introduction in 2025 of the ruble-backed A7A5 stablecoin, which was used for transactions totalling more than $93.3 billion in the year. Recent years have seen Iran‘s proxy networks facilitating money laundering, illegal oil sales and the purchase of arms and other items on-chain, while terrorist organisations linked to the country are using cryptocurrency more than ever before. Hackers linked to North Korea stole $2 billion in 2025; showing that they are more damaging than ever when it comes to both the amounts being stolen and the sophisticated nature of their techniques.
Alternative
As sanctions are introduced to hit individuals, companies and countries very hard, those attempting to evade them must turn to alternative financial channels - and cryptocurrency is currently the main alternative financial channel. Sanctioning the companies along the pathway used by sanctions evaders - such as crypto mixers, with Russia’s Garantex being a good example of this - would make it increasingly difficult for them. The best hope is that sanctions imposed on companies have a domino effect and scare off those that would have contemplated assisting sanctions evaders. But it is very difficult to ensure this. Like many illicit activities on the internet, if one head is cut off, multiple new ones grow.
With the current geopolitical state of the world, entire countries are engaged in evading sanctions and attempting to create and strengthen alternative financial channels. As mentioned earlier, Russia and Iran are the prime examples of this. Russia is pushing both nationally and internationally for a move away from the US dollar and enacted legislation last year to legalise cryptocurrency mining – a step clearly aimed at ensuring more independence from the US dollar.
Rise
Chainalysis emphasises that illegal crypto activity is on the rise generally - not just in relation to sanctions evasion - with stablecoins now accounting for 84% of all illicit transaction volume. Chinese money laundering networks are becoming an increasing presence on the illicit on-chain ecosystem and offer a wide range of criminal services.
While the more traditional forms of cybercrime show no signs of diminishing, there also appears to be closer links developing between on-chain activity and violent crime such as human trafficking and the forcing of individuals to transfer crypto assets at times of peak value. But Chainalysis also makes the point that illegal activity still represents less than 1% of the total value of crypto transactions.
