How Citizens in Sanctioned Countries Access Crypto Exchanges

When governments cut off access to banks, payment systems, and foreign currency, people don’t stop needing money-they find other ways. In countries under international sanctions like Iran, North Korea, and Russia, cryptocurrency has become a lifeline. Not because it’s perfect, but because it’s one of the few systems that still works when everything else is locked down.

Why crypto works when banks don’t

Banks in sanctioned countries are cut off from SWIFT, the global financial messaging system. Credit cards stop working abroad. Foreign wire transfers get blocked. Even sending money to family overseas can trigger automatic freezes. Crypto doesn’t need any of that. It runs on open networks-Bitcoin, Ethereum, and others-that anyone with an internet connection can access. No passport. No bank account. No permission.

The result? Millions of ordinary people in these countries use crypto to buy food, pay for medicine, send remittances, and protect savings from hyperinflation. In Iran, where the rial lost over 400% of its value against the dollar since 2018, crypto isn’t a luxury-it’s survival.

How they actually get in

Most people don’t sign up for Binance or Coinbase directly. Those platforms have strict KYC rules and actively block users from sanctioned regions. Instead, they use indirect paths:

• Peer-to-peer (P2P) marketplaces: Platforms like LocalBitcoins, Paxful, and Telegram-based groups connect buyers and sellers directly. Someone in Turkey or Kazakhstan buys USDT with cash, then sends it to an Iranian user via wallet address.
• Decentralized exchanges (DEXs): Uniswap, SushiSwap, and 1inch let users swap tokens without signing up. No ID needed. Just connect a wallet like MetaMask and trade.
• VPN and proxy networks: Many users mask their IP addresses to bypass geo-blocks. Some use Tor, others use residential proxies from non-sanctioned countries.
• Gift cards and crypto vouchers: People buy Amazon or Steam gift cards in countries like the UAE or India, sell them for crypto on P2P platforms, then convert to cash or stablecoins.

Stablecoins are the real currency

Bitcoin is volatile. Ethereum is slow and expensive for small transfers. That’s why stablecoins dominate in sanctioned economies. USDT (Tether) was the go-to for years-backed by the U.S. dollar, easy to move, widely accepted.

But after Tether froze over 40 Iranian-linked addresses in July 2025, users scrambled. They didn’t disappear. They switched.

DAI, a decentralized stablecoin pegged to the dollar and built on the Polygon network, became the new favorite. Why? Because no single company controls it. No CEO can freeze your wallet. No compliance officer can shut you down. You own the keys. You control the funds.

This shift wasn’t random. It was coordinated. Crypto influencers in Iran, Telegram groups, even state-aligned media pushed the move to DAI. Within weeks, over 60% of stablecoin activity in Iran moved from USDT to DAI.

What happens when exchanges get shut down

When an exchange like Garantex gets sanctioned-its domain seized, its funds frozen-it doesn’t die. It evolves.

After U.S. and German authorities took down Garantex in March 2025, its users didn’t vanish. They moved to Grinex, a new platform with the same interface, same customer support, same wallet addresses. The only difference? The name and the server location.

Behind the scenes, a network of shell companies and payment processors kept things running. Exved, a Dubai-based firm, handled cross-border transfers disguised as "e-commerce payments." MKAN Coin, a Telegram bot, let users trade crypto without ever visiting a website.

This isn’t an exception. It’s the rule. Sanctioned exchanges now operate like viruses-when one strain is killed, another emerges. The infrastructure is decentralized. The users are resilient.

How governments are fighting back

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has become the world’s most active crypto enforcer. As of 2025, it has sanctioned over 1,200 crypto wallet addresses linked to sanctioned countries. That’s not just addresses-it’s people’s life savings.

OFAC’s tactics are growing more aggressive:

• First-ever sanction on a DeFi protocol in January 2025, freezing $150 million in assets.
• Major crackdowns on mixers like Tornado Cash, used to obscure transaction trails.
• Collaboration with INTERPOL and Europol to track cross-border crypto flows.
• $430 million in fines imposed on crypto firms in 2024 for failing to block sanctioned users.

One case that shocked the industry: ShapeShift, a Swiss exchange, paid $750,000 in 2025 for letting users from Iran, Cuba, and Sudan trade on its platform. Why? Because it had zero compliance system. No IP blocking. No KYC. No screening. It was essentially an open door.

Where the loopholes still exist

Sanctions work best when they’re enforced everywhere. But crypto operates globally-and not every country plays by the same rules.

• Dubai: The UAE’s Virtual Assets Regulatory Authority (VARA) lets anyone trade crypto with zero taxes. Many sanctioned users route funds through Dubai-based exchanges or wallets.
• El Salvador: Bitcoin is legal tender. No one asks where your money came from. It’s a quiet transit point.
• Singapore: Strong regulation but no capital gains tax. Easy to open a crypto-friendly bank account if you have the right paperwork.
• Malta and Estonia: These countries offer legal crypto frameworks that attract businesses operating in gray zones.

These jurisdictions don’t support sanctions evasion-they just don’t enforce them. And that’s enough.

What it looks like on the ground

In Tehran, a 32-year-old teacher uses crypto to pay for her son’s insulin. She buys DAI via a Telegram bot, then sends it to a local merchant who exchanges it for cash. The merchant pays her in rials at a rate slightly better than the black market.

In Moscow, a small business owner uses crypto to import spare parts for his repair shop. He pays a vendor in Kazakhstan via a P2P trade, then receives the goods through a logistics company that doesn’t ask questions.

In Pyongyang, the scale is different. State-run mining operations generate crypto, which is then sold abroad to fund weapons programs. OFAC says North Korea is responsible for 38% of all crypto-related sanctions in 2024.

But for most people, it’s not about rebellion. It’s about feeding their families.

Is it working?

Enforcement has had an impact. TRM Labs reported an 11% drop in crypto inflows to Iran in the first half of 2025. But activity didn’t stop-it adapted.

Iran’s government even passed a law in August 2025 taxing crypto profits, treating it like gold or real estate. Why? Because they realized they couldn’t stop it. So they tried to control and tax it.

The truth? Sanctions haven’t stopped crypto access. They’ve made it more complex, more dangerous, and more decentralized.

What’s next?

The arms race is accelerating. Regulators are targeting DeFi protocols, wallet providers, and even crypto influencers who promote bypass methods. Users are responding with better privacy tools-coin mixing, multi-chain swaps, and self-custody wallets that don’t rely on any central server.

One thing is clear: as long as people need to move money across borders and governments try to stop them, crypto will be the tool they turn to. Not because it’s ideal. But because it’s the only thing that still works.