How Citizens in Sanctioned Countries Access Crypto Exchanges
21 August 2025
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Example: In July 2025, Tether froze 42 Iranian-linked addresses, wiping out millions in value. USDT is vulnerable to sanctions targeting the issuing company.
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Example: After the USDT freeze incident, Iranian users quickly shifted to DAI on Polygon network. DAI's decentralized nature makes it harder to control.
Key Insight from Article
Stablecoins like DAI are becoming preferred in sanctioned countries because they're less controlled by central authorities. However, no solution is perfectly safe—users should always maintain multiple wallets and avoid large single transactions.
When governments block access to banks, payment systems, and foreign currency, people find other ways to survive. In countries like Iran, Russia, North Korea, and Syria, that way is often cryptocurrency. Despite intense pressure from U.S. sanctions and global enforcement, citizens in these nations aren’t giving up on crypto-they’re getting smarter about how they use it.
Why crypto is the only option left
Imagine trying to pay for medicine, send money to family, or buy food online-and every bank account gets frozen. That’s the reality for millions in sanctioned countries. Traditional finance is cut off. PayPal, Stripe, and even Western Union are blocked. The only system that still works, no matter the borders or bans, is cryptocurrency. Bitcoin and Ethereum aren’t just speculative assets here. They’re lifelines. Bitcoin makes up 65% of all crypto transactions tied to sanctioned entities, according to OFAC data from 2025. Ethereum follows at 18%. And when volatility hits, people turn to stablecoins-especially DAI and USDT-to hold value without risking price swings. These aren’t investments. They’re savings accounts with no government oversight.How they bypass the blocks
Most people don’t sign up for Binance or Coinbase directly. Those platforms have strict KYC rules and block IP addresses from sanctioned countries. So users go around them. One common method? Using decentralized exchanges (DEXs) like Uniswap or PancakeSwap. No sign-up. No ID. Just connect a wallet and swap tokens. Many users start with a small amount of Bitcoin or ETH sent from a friend abroad, then trade it for DAI or USDT on a DEX. From there, they can use peer-to-peer platforms like LocalBitcoins or Paxful to cash out through trusted traders. Another tactic? Proxy networks and VPNs. But it’s not just about hiding your location. Many users rotate between multiple wallets and mixers to break the trail. Tornado Cash-style services saw five major enforcement actions in 2024 alone-but they’re still used. Why? Because the alternatives are worse.What happens when exchanges get shut down
When a crypto exchange gets sanctioned, it doesn’t disappear. It evolves. Take Garantex, a Russian exchange that processed tens of millions in illicit funds. In March 2025, U.S. and European law enforcement seized its website and froze $26 million in crypto. Instead of shutting down, Garantex’s team moved operations to Grinex-a new platform with the same interface, same customer base, same wallets. They didn’t rebuild. They just rebranded. Even more telling? They partnered with Exved, a cross-border payment service that helps Russian businesses import dual-use goods. And MKAN Coin, a Telegram-based exchange run from Dubai, now acts as Garantex’s successor. Users don’t even notice the change. They just log in with the same credentials and keep trading. This isn’t an exception. It’s the rule. Every time OFAC cracks down, a new platform rises. The system is designed to be resilient.
The stablecoin shift: From USDT to DAI
Tether (USDT) used to be the go-to stablecoin in sanctioned countries. It’s liquid, widely accepted, and easy to move. But in July 2025, Tether froze 42 Iranian-linked addresses tied to Nobitex, one of Iran’s largest exchanges. The move wiped out millions in value overnight. The response was immediate. Iranian users didn’t panic. They adapted. Within days, crypto influencers and local groups pushed people to swap USDT for DAI on the Polygon network. DAI, issued by MakerDAO, is decentralized and harder to freeze. It’s not perfect-but it’s less controlled. This shift wasn’t random. It was strategic. And it worked. While crypto inflows to Iran dropped 11% in early 2025, activity didn’t stop. It just moved.How governments are fighting back
OFAC didn’t start targeting crypto until 2018. Now, 23% of all new sanctions in 2024 were crypto-related-up from 17% the year before. They’ve added over 1,200 crypto wallet addresses to their Specially Designated Nationals (SDN) List. They’ve frozen $150 million in a DeFi protocol for the first time. And they’ve teamed up with INTERPOL and Europol to track cross-border flows. But enforcement has limits. You can freeze a wallet. You can’t freeze a blockchain. You can shut down a website. You can’t shut down a peer-to-peer network. The $430 million in penalties handed to crypto firms in 2024 sounds huge. But it’s a drop in the ocean compared to the $6.9 billion in illicit crypto transactions linked to sanctioned entities over the past two years.
Why some countries are becoming crypto havens
Sanctioned citizens aren’t just using crypto-they’re moving through it. And they’re not doing it alone. Dubai’s VARA authority has become a magnet for crypto businesses. Over 1,000 firms operate there under a tax-free regime. No capital gains tax. No reporting requirements. Just a clear legal path for crypto trading. El Salvador made Bitcoin legal tender. Singapore has no crypto taxes and strong anti-money-laundering rules. Malta and Estonia offer favorable licensing. These aren’t just tax havens. They’re access points. A Russian user might send ETH to a friend in Dubai. That friend converts it to USD and wires it to a third country. The trail gets messy. And by the time authorities trace it, the money’s already spent.The new tax trap
Iran didn’t just react to crypto’s rise-it tried to control it. In August 2025, it passed a law taxing crypto profits at the same rate as gold, real estate, and forex speculation. The goal? To bring crypto into the state’s financial grip. But here’s the irony: the tax law didn’t stop trading. It just made people more careful. Now, Iranians use cash-based P2P trades or trade through intermediaries to avoid reporting. The tax didn’t kill crypto. It made it underground.What’s next?
This isn’t a battle between good and bad. It’s a battle between control and survival. Governments keep tightening rules. But citizens keep finding new ways. DeFi protocols, cross-border payment platforms, Telegram-based exchanges, and wallet rotation are now standard tools. Enforcement is getting smarter-but so are users. The real question isn’t whether people in sanctioned countries can access crypto. It’s whether the world is ready to accept that, for them, crypto isn’t a luxury. It’s a necessity.As long as banks are politicized and borders are weapons, crypto will remain the one system that doesn’t ask permission to work.
Can you still use Binance or Coinbase in sanctioned countries?
Most major exchanges like Binance and Coinbase block users from sanctioned countries through IP detection and KYC checks. While some users bypass these with VPNs and fake IDs, the risk of account freezes and legal consequences is high. Decentralized exchanges (DEXs) and peer-to-peer platforms are far more common and reliable for users in these regions.
Why do people in sanctioned countries prefer Bitcoin over other cryptos?
Bitcoin is the most liquid, widely recognized, and hardest-to-trace cryptocurrency. It’s accepted globally, has deep liquidity on most exchanges, and doesn’t require complex smart contracts. For people needing to move value across borders quickly and discreetly, Bitcoin remains the top choice-accounting for 65% of all sanctioned crypto transactions in 2025.
Are stablecoins like USDT and DAI safe to use?
USDT is convenient but risky-it’s issued by Tether, a centralized company that complies with U.S. sanctions. In 2025, Tether froze over 40 Iranian-linked addresses. DAI, on the other hand, is decentralized and governed by code, not a company. While not completely immune to pressure, DAI is much harder to freeze, making it the preferred stablecoin for users in sanctioned countries after mid-2025.
What happens if your crypto wallet gets sanctioned?
If a wallet is added to OFAC’s SDN List, any exchange or service that checks sanctions will block transactions to or from it. The funds aren’t stolen-they’re frozen. To recover access, users must create new wallets, move funds through mixers or DEXs, or convert assets into different tokens. Many use multiple wallets in rotation to avoid detection.
Can governments shut down cryptocurrency networks entirely?
No. Cryptocurrencies run on decentralized networks spread across thousands of computers worldwide. Even if a country bans crypto, users can still connect to the network via satellite, mesh networks, or Tor. The blockchain itself can’t be shut down-only access points like exchanges or apps can be blocked. That’s why crypto remains resilient even under the strictest sanctions.
Is using crypto in sanctioned countries illegal?
For citizens in sanctioned countries, using crypto is rarely illegal under their own laws-in fact, many governments tacitly allow it. But for users outside those countries, helping them access crypto may violate U.S. or EU sanctions. Exchanges that serve these users risk fines, like ShapeShift’s $750,000 penalty in 2025. The legal risk falls on service providers, not always on end users.
How do people in these countries get crypto in the first place?
Most start with crypto sent from friends or family abroad via P2P platforms. Others use crypto ATMs in neighboring countries, or buy small amounts from local traders using cash. Some mine Bitcoin using cheap electricity, especially in Russia and Iran. Once they have a small amount, they swap it for stablecoins on decentralized exchanges and build from there.
Are crypto mixers still effective despite crackdowns?
Yes, but they’ve evolved. Early mixers like Tornado Cash were centralized and easier to target. Now, users use chain-hopping-swapping BTC to ETH, then to Polygon, then to a privacy coin like Monero-before converting back. This multi-layered approach makes tracing nearly impossible, even for blockchain analysts. Mixers are less about one tool and more about a strategy.