Crypto in Conflict Zones and Sanctioned Regions

A factual look at how cryptocurrency has been used during wars, currency collapses, and under authoritarian or sanctioned conditions — from Ukraine and Venezuela to Afghanistan and Lebanon — and the dual-use problem it creates.

20 min · beginner · part of Real-World Use Cases

When Banks Stop Working

Most of the developed world has the luxury of treating cryptocurrency as an investment, a curiosity, or a speculative asset. For tens of millions of people living in conflict zones, hyperinflation regimes, or under sanctions, crypto serves a different purpose: it is the only working financial infrastructure they can access. This lesson focuses on documented use of cryptocurrency in geographies where conventional banking has partially or fully failed: war-torn Ukraine, hyperinflationary Venezuela and Lebanon, sanctioned Iran, Taliban-controlled Afghanistan, embargoed Cuba, and post-2020 Hong Kong. The data come from Chainalysis Geography of Crypto Adoption Reports, Coin Center policy briefs, the Human Rights Foundation's documentation, peer-reviewed research, and on-record reporting by news organizations including the BBC, Reuters, and Rest of World. The hard truth this lesson confronts is the dual-use problem: the same tools that enable a Venezuelan family to preserve savings in USDT also enable sanctioned actors to move money across borders. The same self-custody that protects an Afghan woman's savings from Taliban confiscation also protects a North Korean state hacker's stolen funds. Crypto cannot be designed in such a way that it works for refugees and refuses to work for criminals; the technology is property-neutral. Honest analysis acknowledges both sides simultaneously. Module 23 covers the criminal lens of state actors; this lesson covers the geopolitical and humanitarian context. Both are real, and both must be held in mind together.

Also in this lesson

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.

Continue this lesson — 6 more sections in the CryptoBipto app.

Open lesson

Educational only — not financial advice.