Crypto is Financing the Axis of Evasion
Seven years ago, I discovered a transnational network with criminal, government and military ties in Venezuela, Iran, Turkey and Russia that included a gold-backed crypto platform.
That discovery, combined with my coverage of economic statecraft and knowledge of financial settlement systems, led me to posit that crypto could be used to surreptitiously settle trade at scale between globally sanctioned economies and sectors, sidestepping dollar hegemony.
Almost everyone--including at the U.S. Department of the Treasury-- dismissed the theory, pointing to off-ramping needs and what they viewed as insufficient liquidity in both crypto and sanctioned markets. At the time, my assessment was that the levels of trade in sanctioned goods already challenged that liquidity argument, as indicated by the Halkbank case alone.
This new Chainalysis report published today on crypto crime in 2025 rebuts the crypto market liquidity argument and adds to the growing body of evidence that blockchain currency is already embedded into the architecture of the Axis of Evasion–the sanctioned trade between the largest sanctioned economies and industries - Russia, Iran, China, Venezuela and their illicit-hub facilitators.
A key finding of the report is that sanctioned entities received around $100 billion in crypto last year. That’s a large sum - the size of a small Eastern European economy.
But the actual amount of illicit activity on the blockchain is likely far, far greater: Chainalysis’s report is based on crypto addresses already identified by authorities.
The amount of illicit activity–both trade and finance–detected and disrupted represents a fraction of the total amount, according to numerous studies. Even with a highly optimistic and overly conservative rate of a 10% detection rate, it would suggest the total amount of illicit activity in exchange-platform markets was closer to $1 trillion.
That figure is in line with United Nation estimates of the value of money laundering globally at 2%-5% of world GDP, given total blockchain flows. The IMF estimates that the largest centralized and decentralized exchanges recorded about $15 trillion in spot trading volume in 2025, while decentralized exchanges now account for roughly 20–36% of centralized exchange volume. Separate research on blockchain activity suggests trillions of dollars more move annually in direct wallet-to-wallet transfers, including payments, DeFi (decentralized finance) activity, and stablecoin settlements.
To be clear, the digital ledger of blockchain allows transactions to be traced along an immutable arc of financial provenance. And the majority of money-laundering is still conducted through traditional financial systems. But while U.S. crypto platforms are increasingly held to the same know-your-customer requirements as banks—fostering financial transparency—anonymity on foreign platforms provides cover for illicit transactions.