TLDR
- Yemeni citizens increasingly use DeFi platforms for financial services amid US sanctions against Houthis
- DeFi accounts for 63% of Yemen’s crypto web traffic while centralized exchanges only make up 18%
- US sanctions targeted eight Houthi cryptocurrency addresses linked to over $900 million in outflows
- Crypto transactions funded weapons procurement, including UAVs from Russian brokers
- Crypto usage in Yemen spiked 270% after Houthis were relisted as a terrorist organization in January 2024
Yemeni citizens are turning to cryptocurrency platforms as a financial lifeline amid ongoing US sanctions targeting the Houthi group. This shift comes as traditional banking systems become increasingly difficult to access in the conflict-torn nation.
The United States has stepped up economic pressure on the Houthis, formally known as Ansar Allah, who control large portions of Yemen including the capital Sanaa. On April 17, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the International Bank of Yemen YSC, further restricting financial options for many Yemenis.
According to blockchain intelligence firm TRM Labs, decentralized finance (DeFi) platforms now account for over 63% of Yemen’s crypto-related web traffic. Global centralized exchanges make up just 18% of this activity. This preference for DeFi may reflect the need for financial systems that operate without intermediaries in a region where banking institutions are often unreliable or completely inaccessible.
Sanctions Drive Crypto Adoption
Yemen has been in civil war since September 2014, with the Houthi group controlling regions where approximately 70% of the population resides. US sanctions have repeatedly targeted financial infrastructure in the country, aiming to disrupt Houthi activities.
The impact of these sanctions on crypto adoption is clear. TRM Labs reports that following the Biden administration’s relisting of the Houthis as a Specially Designated Global Terrorist in January 2024, a Yemen-based cryptocurrency exchange experienced a 270% increase in overall trading volume.
Another spike of 223% occurred in the three months following US President Donald Trump’s election and the subsequent reinstating of the Houthis as a foreign terrorist organization on January 22. These surges demonstrate how financial restrictions drive citizens toward alternative banking solutions.
For many Yemenis, cryptocurrency offers a way to conduct essential financial activities despite the collapse of traditional banking. Peer-to-peer transactions enable cross-border transfers and remittances, providing a crucial financial lifeline for families dependent on money sent from the Yemeni diaspora abroad.
Houthi Cryptocurrency Operations
On April 2, 2025, OFAC sanctioned eight cryptocurrency addresses linked to the Houthis. TRM Labs’ analysis of these addresses revealed over $900 million in outflows to high-risk and sanctioned entities, including Russian brokers selling unmanned aerial vehicles (UAVs) and anti-UAV equipment.
Some of these transactions were facilitated through intermediary addresses that also sent tens of millions to financial facilitators linked to Hezbollah. Additional outflows went to other high-risk entities, including Sa’id al-Jamal, an Iran-based financier associated with both the Houthis and Iran’s Islamic Revolutionary Guard Corps-Qods Force.
The Houthi group has also experimented with cryptocurrency mining since at least 2017. Reports indicate they utilized services like Coinhive—a now-defunct JavaScript-based cryptocurrency miner—through YemenNet, the country’s primary internet service provider under their control. This approach allowed them to generate cryptocurrency using YemenNet users’ computing power without needing extensive local hardware.
In December 2024, the US Treasury sanctioned five additional cryptocurrency wallets linked to Sa’id Al-Jamal. These addresses collectively received over $330 million in total inflows and used various services, both centralized and decentralized, to facilitate transactions.
Despite these high-profile cases, cryptocurrency adoption among the general population in Yemen remains limited. Internet infrastructure challenges, low financial literacy about digital assets, and lack of merchant acceptance are key barriers. However, the ongoing conflict and economic instability continue to push more citizens toward crypto out of necessity rather than speculation.
As sanctions against the Houthis and their Iranian backers intensify, TRM Labs expects the group’s use of cryptocurrency to grow in both scale and sophistication. Decentralized digital currencies offer an alternative that is less susceptible to oversight as traditional financial channels become increasingly restricted.
