Inside the $900 Million Crypto Network Funding Yemen's Houthi Fighters

TLDR

Table of Contents

Yemeni citizens increasingly use DeFi protocols (63% of crypto traffic) as US sanctions target Houthi group
Recent US sanctions included eight cryptocurrency addresses linked to Houthis with over $900 million in outflows
Houthi crypto activity includes weapons procurement from Russian brokers and transactions with sanctioned entities
Cryptocurrency adoption in Yemen spiked 270% after Biden administration relisted Houthis as terrorists
Both Houthi militants and ordinary Yemenis use crypto to bypass traditional financial restrictions amid ongoing conflict

Cryptocurrency use is growing in Yemen as both ordinary citizens and the Houthi militant group turn to digital assets amid tightening US sanctions and ongoing civil conflict. Recent data from blockchain intelligence firm TRM Labs shows decentralized finance (DeFi) platforms now account for over 63% of Yemen’s crypto-related web traffic, while centralized exchanges make up just 18%.

The United States recently intensified economic measures against the Houthis, with the Treasury Department’s Office of Foreign Assets Control (OFAC) imposing sanctions on the Yemen-based International Bank of Yemen on April 17, 2023. This follows earlier sanctions on April 2, 2025, which targeted eight cryptocurrency addresses linked to the Houthis.

On-chain analysis of these addresses revealed over $900 million in outflows to high-risk and OFAC-sanctioned entities. These transactions included payments to a Russian broker selling unmanned aerial vehicles (UAVs) and anti-UAV equipment, highlighting how the militants use crypto for military procurement.

Sanctions Drive Crypto Adoption

For ordinary Yemenis, cryptocurrencies offer a way to maintain financial access in a country where traditional banking services have been severely disrupted by years of conflict. Many use peer-to-peer crypto transactions to move funds across borders or receive remittances from family members abroad.

“For those who use cryptocurrencies in Yemen, the ability to bypass the disruption in local financial services offers a modicum of financial resilience, especially as banks can be difficult to access or are simply inoperable due to the ongoing conflict,” according to TRM Labs’ April 17 report.

The civil war between the Yemeni government and the Houthi group has raged since September 2014. The Houthis now control about 70% of Yemen’s population, including the capital Sanaa, where they have established governance structures overseeing local administration, security, and justice systems.

Following the Biden administration’s relisting of the Houthis as a Specially Designated Global Terrorist in January 2024, a Yemen-based cryptocurrency exchange tracked by TRM experienced a 270% increase in overall volume. Though this eventually returned to pre-spike levels, it surged again by 223% after Donald Trump’s election and the reinstating of the Houthis as a foreign terrorist organization on January 22.

Houthi Crypto Operations

The Houthi movement has leveraged cryptocurrency in multiple ways. Evidence indicates they have been involved in mining decentralized cryptocurrencies since at least 2017, reportedly utilizing services like the now-defunct Coinhive to mine directly through YemenNet, the country’s primary internet service provider under their control.

In December 2024, OFAC identified and added five cryptocurrency wallets linked to Sa’id Al-Jamal, an Iran-based financier associated with both the Houthis and Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), to the Specially Designated Nationals and Blocked Persons List. These addresses received over $330 million in total inflows according to TRM Labs.

The Houthis have emerged as a key member of Iran’s “axis of resistance,” which includes Hezbollah, Hamas, and Shia Iraqi militias. Their attacks on commercial ships in the Red Sea, which they claim are in retaliation against Israeli actions in Gaza, have disrupted global shipping routes and raised maritime insurance costs.

Future of Crypto in Yemen

Currently, Yemen doesn’t have legislation in place for cryptocurrency use, and adoption remains limited due to internet infrastructure challenges and low financial literacy. However, as international sanctions tighten, both the Houthis and ordinary Yemenis are likely to increase their reliance on digital currencies.

“Given the intensifying international sanctions on the Houthis and their primary backer, Iran, the group’s use of cryptocurrency is likely to grow in both scale and sophistication,” TRM Labs noted. “As traditional financial avenues become increasingly restricted, decentralized digital currencies offer an alternative that is less susceptible to oversight and harder to trace.”

The Houthis’ cryptocurrency activities have connected them to a network of high-risk entities. Their designated addresses show links to financial facilitators associated with Hezbollah and transactions with addresses on Israel’s National Bureau for Counter Terror Financing cryptocurrency seizure lists.

While dedicated cryptocurrency exchanges are not yet common in Houthi-controlled territory, some money service businesses in the region have begun offering cryptocurrency services alongside traditional financial services.

For Yemeni civilians caught in the crossfire of sanctions and war, cryptocurrencies provide a rare financial lifeline in a country where economic stability has been shattered by years of conflict.

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