Crypto in Conflict Zones and Sanctioned Regions

What you'll learn

• When Banks Stop Working
• Ukraine 2022: A War-Time Funding Mechanism
• Venezuela and Lebanon: When Currency Collapses
• Iran, Cuba, and the Sanctions-Evasion Question
• Afghanistan, Hong Kong: Crypto Under Authoritarian Restriction
• The Dual-Use Problem and Honest Framing
• For Deeper Reading

Key terms

Ukraine crypto donations

Cryptocurrency contributions to Ukrainian government wallets and aligned NGOs after February 24, 2022. Approximately $100M+ to direct government wallets and over $225M including aligned NGOs by end of 2022. Includes Bitcoin, Ethereum, USDT, USDC, DOT, SOL, NEAR.

Meta History Museum of War

Ukraine government NFT donation collection launched March 2022. Raised approximately $190,000 by end of 2022 by selling 1,282 NFTs commemorating events of the Russia-Ukraine war.

Russia-aligned crypto donations

Cryptocurrency contributions to Russian groups supporting military operations and aligned militia. Estimates from Chainalysis, Elliptic, and Crystal Intelligence ranged from $2M to $7.2M through early 2023, depending on which wallets were included.

Venezuela USDT dominance

USDT (Tether) accounted for approximately 91% of stablecoin transaction volume in Venezuela through 2023-2024, replacing the bolivar for everyday savings, larger purchases, and remittances. The bolivar lost over 99.99% of its value against the US dollar from 2013 to 2024.

Petro (state cryptocurrency)

Venezuela's state-backed cryptocurrency launched February 2018, claimed to be backed by oil reserves. Failed to gain traction; was officially terminated on January 15, 2024.

Lebanese banking crisis (2019-2024)

Beginning October 2019, Lebanese banks imposed informal capital controls limiting withdrawals. By 2022 the lira had lost over 95% of value; bank deposits were forcibly converted at 80-90% haircuts. Bitcoin holders from 2019 onward outperformed bank savers.

Iran Bitcoin mining

Legalized in 2019 with government licenses. Iran's share of global Bitcoin hashrate reached 4-7% during 2020-2021 per Cambridge Centre for Alternative Finance data, dropping after periodic bans tied to grid strain. Iranian government has acknowledged using crypto for sanctioned cross-border trade.

Afghan women and Bitcoin

Roya Mahboob and the Digital Citizen Fund taught Bitcoin to approximately 16,000 Afghan women starting in 2013. After the Taliban return in August 2021, this network became a documented mechanism for female-headed households to receive cross-border support and preserve savings.

HRF Bitcoin Development Fund

The Human Rights Foundation fund established in 2020 to support tools enabling crypto use under authoritarian regimes. Disbursed approximately $7M in grants through 2024 across Bitcoin Core development, Lightning tools, privacy wallets, and activist education programs.

Lazarus Group attributed thefts

Approximately $3-6B in cryptocurrency stolen since 2017 attributed to North Korean state intelligence by US Treasury, FBI, UN Panel of Experts, and Chainalysis. Includes the Ronin/Axie hack ($625M, 2022), Atomic Wallet ($100M+, 2023), and the Bybit hack ($1.5B, February 2025 — the largest crypto heist in history).

Dual-use problem

The fact that the same cryptocurrency tools serving legitimate humanitarian use also serve illegitimate state-actor sanctions evasion. The technology cannot be designed to refuse criminal use without also refusing humanitarian use; compliance is therefore enforced at chokepoints (exchanges, fiat ramps, stablecoin issuers) rather than at the protocol level.

Hong Kong post-2020

After the June 2020 National Security Law, Hong Kong saw both increased crypto adoption among individuals (capital portability, hedging emigration plans) and emergence as a regulated institutional crypto hub (HKMA-licensed VASPs, spot Bitcoin and Ethereum ETFs from April 2024). Demonstrates the technology's dual nature even within a single jurisdiction.