Sanctions Evasion 2.0: Unpacking the Role of Cryptocurrency in North Korea and Iran's External Trade Relations

This study delve into various ways through which cryptocurrency is being used for sanctions 
evasion, specifically in relation to the external trade relations of North Korea and Iran. The 
paper seeks to contribute to understanding the ways decentralized digital currencies support 
illicit financial activities via the use of a quantitative research methodology which involves an 
examination of official reports, policy documents, academic work and investigative journalism. 
The study is based on the intersectionality of state power, financial sovereignty and digital 
innovation in a multipolar world and based on the Theory of Realism and Constructivism. 
Analysis also shows that North Korea spends billions of cryptocurrencies every year stealing 
and laundering money with state-sponsored cybercrime, primarily through the Lazarus Group. 
At the same time, Iran is adopting a more institutionalized approach by legalizing crypto 
mining, guiding revenue towards the Central Bank and sanctioning entities taking advantage 
in trading with crypto exchanges and crypto mixers. Lastly, the study shows that the anonymity 
and border lessness of digital assets make them a problem to enforce globally and undermine 
traditional sanctions regimes. To further enhance the latter, it encourages international 
cooperation on crypto regulation, blockchain analytics capabilities, and addressed tailored 
sanctions on crypto service providers that aid in obfuscation. In order to solve the two 
challenges of technological innovation and illicit finance, a harmonized legal framework is 
needed.