U.S. Sanctions Russian Crypto Exchange Garantex in Crackdown on Houthi Funding

The U.S. Department of the Treasury has imposed fresh sanctions aimed at dismantling the financial networks supporting Yemen’s Houthi movement, with a specific focus on digital currency channels.

In a coordinated move, the Office of Foreign Assets Control (OFAC) blacklisted eight cryptocurrency addresses allegedly controlled by the Houthis, a group officially designated as a Specially Designated Global Terrorist (SDGT) entity.

This latest round of sanctions follows renewed concerns over the group’s ties to Iran’s Islamic Revolutionary Guard Corps–Qods Force (IRGC-QF) and other regional actors.

The addresses identified are believed to be part of a broader infrastructure facilitating the transfer of funds to support militant activities, including attacks on commercial shipping in the Red Sea.

Two of the designated wallets have previously been linked to Sa’id al-Jamal, an Iran-based financier with known affiliations to both the Houthis and the IRGC-QF.

Other addresses are connected to entities previously identified by Israel’s National Bureau for Counter Terror Financing (NBCTF) as participating in terror financing networks.

Blockchain intelligence firm TRM Labs has analyzed the addresses in question and found millions of dollars in transaction volume tied to sanctioned entities.

These include direct links to Garantex, a Russian cryptocurrency exchange that is already under U.S. sanctions.

The wallets also show interactions with suppliers of unmanned aerial vehicle (UAV) components, suggesting funds may have been used to procure military equipment.

This action is part of a broader U.S. strategy to curtail the Houthis’ funding streams, both traditional and digital.

Today, OFAC sanctioned the Houthi network for facilitating commodity trades from Russia—including weapons and stolen Ukrainian grain—via cryptocurrency. 8 crypto wallets tied to these illicit activities were identified. Read our blog to learn more: https://t.co/nuwZu1c4OL pic.twitter.com/rwE3h6JcPp

On March 15, the U.S. conducted airstrikes on Houthi positions in Yemen, following increased attacks on Red Sea shipping.

The Treasury has since intensified financial pressure, reinstating the Houthis’ terrorist designation in February 2024 and targeting their cryptocurrency infrastructure.

The Houthi organization, also known as Ansar Allah, controls vast portions of Yemen, including the capital, Sanaa.

Their funding sources include taxation, customs duties, fuel and arms smuggling, and increasingly, the use of digital assets.

U.S. intelligence has reported that the group began cryptocurrency mining operations as early as 2017 to gain financial independence and evade sanctions.

However, the overall impact of their crypto-mining activities remains limited.

A key player in the Houthis’ financial apparatus is al-Jamal’s network, which has relied on local money service businesses such as Mohammed Ali Al Thawr Exchange and Al Hazmi Exchange.

These institutions have been instrumental in laundering millions of dollars through entities like the Davos Exchange and Remittances Company, which pose as legitimate financial operations.

The eight sanctioned wallets are now flagged in TRM Labs’ systems.

The firm continues to work closely with U.S., Israeli, and global law enforcement agencies to monitor and disrupt the use of cryptocurrency in terror financing.

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