Iran intensifies military weapon transactions using cryptocurrencies — a new method to bypass sanctions?

Iran’s National Defense Export Organization (a state-owned entity called Mindex) has finally revealed its stance of officially accepting weapon payments in cryptocurrency. In the international sale of strategically important military systems such as Emad-class ballistic missiles, Shahid drones, and Shahid Soleimani-class warships, they are willing to accept payments not only in traditional currencies but also in cryptocurrencies and barter transactions.

Cryptocurrencies as a Payment Method Under Sanctions

For Iran, which faces severe economic sanctions from Western countries, cryptocurrencies seem to be a “trump card to bypass sanctions.” According to publicly available documents from Mindex, the organization has conducted transactions with 35 countries, and similar weapons have been supplied to support groups operating in conflict zones.

What is particularly noteworthy is that Iran openly promotes the use of cryptocurrencies for settlement. In the FAQ section, it explicitly states that “contract fulfillment is not hindered under sanctions,” and guarantees that the purchased weapons will be “delivered as quickly as possible.”

U.S. Authorities Warn of “Shadow Banking” Networks

In fact, Iran’s misuse of cryptocurrencies is not a new phenomenon. In September last year, the U.S. Department of the Treasury identified a “shadow banking” network operated by individuals related to the Islamic Revolutionary Guard Corps (IRGC), which was used to move hundreds of millions of dollars’ worth of oil sales proceeds overseas via cryptocurrencies. This demonstrates how Iran has maximized the anonymity and cross-border transfer speed of cryptocurrencies to circumvent international financial regulations.

Iran’s Position in the Global Military Export Market

According to the Stockholm International Peace Research Institute’s 2024 statistics, Iran ranks 18th among the world’s major arms exporters. It follows Norway and Australia and is a significant military supplier that cannot be ignored.

The introduction of cryptocurrency payments reflects Iran’s strong desire to maintain and expand its military industry despite economic isolation. A new phase of state-level misuse of cryptocurrencies is undoubtedly underway.