In 2024, jurisdictions and entities on OFAC sanctions lists received $15.8 billion through cryptocurrency transactions, accounting for about 39% of all illegal turnover, according to data from Chainalysis.
State Involvement in Illegal Transactions
State involvement in illegal transactions reached a record high in 2024, with sanctioned jurisdictions accounting for 60% of illegal crypto transactions, surpassing individual entities.
This shift is largely attributed to Iranian centralized exchanges, which saw a surge in activity and outflows. Local services experienced a 70% increase in outflows, totaling $4.8 billion compared to the previous year.
OFAC’s new sanctions in 2024 primarily targeted financial infrastructure supporting illegal financial activities, rather than individuals and small groups.
Chainalysis noted that as economic pressure intensifies, sanctioned countries are turning to cryptocurrencies to maintain trade and access capital.
Russia and Iran are strengthening ties with BRICS countries to develop payment mechanisms outside the traditional dollar system, including the possibility of creating a common digital currency.
Resilience of Tornado Cash
Chainalysis highlighted the role of crypto mixers in circumventing sanctions, particularly Tornado Cash. Despite OFAC sanctions (lifted in January 2025), developer arrests, and legal proceedings, Tornado Cash continued to operate.
After its web interface was disabled, inflows dropped by 90%, but operations continued due to its decentralized smart contract system. In 2024, inflows increased by 108%.
”Although the flow of funds has not yet returned to pre-sanction levels, Tornado Cash still processes hundreds of millions of dollars in transactions monthly,” analysts noted.
They emphasized that while blockchain transparency allows for tracking illegal activities, the decentralized nature of these services significantly complicates efforts to forcibly shut them down.
This article was originally Posted on Coinpaper.com
