Cryptocurrency use in Yemen is rising significantly among citizens and Houthis to bypass financial restrictions due to US sanctions. Over 63% of crypto traffic comes from DeFi platforms. The US recently targeted Houthi-linked addresses linked to over $900 million in transactions. Cryptos allow ordinary Yemenis to access finances disrupted by conflict, while the Houthis utilise them for military procurement, showcasing an evolving financial landscape amid ongoing turmoil.
Cryptocurrency adoption in Yemen is notably increasing, driven by both ordinary citizens and the Houthi militant group as a means to circumvent traditional financial restrictions due to ongoing civil conflict and tightening US sanctions. According to recent data from blockchain intelligence firm TRM Labs, decentralized finance (DeFi) platforms constitute over 63% of Yemen’s crypto-related web traffic, starkly contrasted by just 18% for centralized exchanges.
In April 2023, the US Treasury’s Office of Foreign Assets Control (OFAC) imposed new sanctions on the Houthis, including on eight cryptocurrency addresses linked to them. Analysis reveals these addresses facilitated over $900 million in outflows to high-risk entities, for instance, involving payments for unmanned aerial vehicles (UAVs) from a Russian broker, showcasing the militants’ use of crypto for military procurement.
For the general populace in Yemen, cryptocurrencies offer a means to access financial services where conventional banking has failed due to conflict. Peer-to-peer transactions are commonly used for sending remittances or transferring funds across borders, providing important financial resilience under adverse conditions according to the TRM Labs report.
The Houthis have taken advantage of cryptocurrency since at least 2017, reportedly engaging in mining and using services like Coinhive via YemenNet, their controlled internet service. By December 2024, OFAC identified several wallets linked to Sa’id Al-Jamal, an Iran-based financier connected to the Houthis, which received inflows exceeding $330 million.
Having become instrumental in Iran’s “axis of resistance” alongside Hezbollah and Hamas, Houthis have disrupted global shipping routes with attacks in the Red Sea, claiming retaliation against Israeli actions. Despite the lack of formal cryptocurrency legislation in Yemen, both the Houthis’ and civilians’ reliance on digital currencies is anticipated to grow as sanctions intensify.
TRM Labs suggests that as traditional financial avenues diminish, the sophistication of the Houthis’ cryptocurrency use will likely evolve. Their activities are connected to high-risk entities and transactions linked to groups such as Hezbollah, indicating a broader financial network. While dedicated cryptocurrency exchanges are rare in Houthi territory, some regional money service businesses are beginning to offer digital currency transactions alongside traditional services, providing a crucial financial lifeline amid ongoing conflict.
