Iran-Backed Houthi Group Faces Sanctions On Cryptocurrency Wallets Funding War Efforts

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The Treasury Department took action against a Houthi financial network, imposing sanctions on cryptocurrency wallets used by the Iran-backed militant group to fund its war machine.

What Happened: According to a Wednesday press release, the Department of the Treasury’s Office of Foreign Assets Control identified eight digital wallets used by the Yemen-based group to help procure millions worth of weapons and commodities, including stolen Ukrainian grain, from Russia.

The sanctions targeted Russian-based Afghan nationals Hushang and Sohrab Ghairat, who have facilitated commercial operations on behalf of the Houthis, and particularly Sa’id al-Jamal, who had cryptocurrency addresses included in his December 2024 sanctions designation.

Further investigation by Chainalysis, a firm that tracks illicit cryptocurrency activity, revealed that the wallets moved nearly $1 billion worth of funds linked to sanctioned entities. The majority of the transactions funded Houthi operations in Yemen and the Red Sea region.

Moreover, Houthis used deposit addresses at Russia-based cryptocurrency Garantex, a known facilitator of money laundering, which received over $45 million. The group processed nearly $2.5 million involving wallets previously identified as being involved in funding Hamas, the group embroiled in a conflict with Israel, Chainalysis said.

Why It Matters: The U.S. airstrikes in Yemen earlier this month resulted in several casualties, leading the Houthis to issue a warning of retaliation. This retaliation threat has escalated tensions in the region.

The Houthis are an armed rebel group from Yemen known for their opposition to Israel. They are backed by Iran’s Islamic Revolutionary Guards.

The group has been attacking ships in the Red Sea, a key global trade route, since late 2023, following the breakout of the Israel-Hamas war. The U.S. has responded with airstrikes to weaken the Houthis’ ability to launch these attacks.

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