Introduction
Yemen-based Ansar Allah, widely known as the Houthis, continues to have a profound impact on global security. The group’s ongoing operations in the Red Sea affected an estimated US $1 trillion worth of maritime cargo between October 2023 and May 2024, and despite periodic kinetic attacks, its operations show no signs of abating. Moreover, evidence suggests the Houthis enjoy the financial and military backing of Russia and China, in addition to their established ties with Iran. This Insight explores the Houthis’ financing mechanisms, including leveraging technology to evade sanctions and the involvement of foreign facilitators with demonstrable and plausible ties to foreign governments.
Generating Cash Locally and Abroad
Contrary to some popular conceptions, the Houthis’ relationship with Iran and other foreign backers is not that of a charity case. Although the group benefits from its foreign partnerships, it must generate revenue to pursue its own ends. For this reason, the Houthis oversee vast global financial networks, engaging in illicit trade and leveraging technology to finance its multibillion-dollar operation.
Air attacks against the Houthis in Yemen have constrained their local revenue generation potential. In recent years, the group’s control over ports near Hodeida has been central to its local revenue streams as Yemen highly depends on imports, which serve 90% of its needs, including basic foodstuffs and fuels. The Houthis capitalise on this reality by levying high fees at ports under their control and tariffs of up to 100% on goods brought in from Yemeni ports outside of their control. The group also uses its ports to generate revenue through smuggling operations, reselling Iranian oil and weapons to buyers in East Africa, including the Somalia-based al-Shabaab and Islamic State Somalia (ISS). However, the ongoing war has likely taken a toll on these revenue generation schemes, with the recent bombings of key Houthi ports damaging much of the group’s core infrastructure.
Despite setbacks, the Houthis remain financially resilient, leveraging their ongoing operations against maritime shipping traffic to generate revenue. According to a recent report from the UN Security Council, the Houthis take in an estimated US $180 million per month in fees levied on ships seeking to transit the Bab al-Mandab Strait. According to the report, shipping companies pay these ransoms through Hawala – informal offline financial networks used to transfer money worldwide – in coordination with a company affiliated with a top Houthi leader. Although some maritime experts have expressed scepticism as to the full scope of these figures, the Houthis apparently remain in a strong financial position to continue their Red Sea operations.
The Houthis generate much of their cash revenue from abroad with the help of Yemeni and foreign agents. A Yemeni national named Sa’id al-Jamal is the apparent mastermind of these operations, running a vast Iranian oil smuggling scheme that sells to buyers in East Asia, including privately-owned “teapot” oil refineries on China’s Shandong coast. The US Treasury’s Office of Foreign Asset Control (OFAC) has sanctioned al-Jamal and multiple shipping companies and individuals based in Hong Kong, Malaysia, and elsewhere in relation to these activities. China imports some 90% of Iran’s , an estimated US $500 million annually, including shipments from the al-Jamal network. In March, OFAC issued additional sanctions on a Chinese teapot refinery in relation to its receipt of shipments from the al-Jamal network, prompting Beijing to hold off on its Iranian oil purchases. China’s teapot refineries shield the country’s massive state-owned conglomerates from sanctions, which Beijing is likely more sensitive to amid the country’s ongoing economic downturn and growing protectionism internationally.
Like any sanctioned group, the Houthis cannot utilise established financial systems to purchase its import needs, including weapons. To fully harness their economic potential, the group has partnered with foreign intermediaries to harness blockchain technology. The Houthis have a long history of engaging with cryptocurrencies, which they have been mining since at least 2017. However, poor internet infrastructure and local economic constraints have limited cryptocurrency adoption and usage in Yemen. For this reason, the Houthis have looked abroad for assistance from global facilitators, with the known and likely aid of foreign governments.
Figure 1: Hawala is the most likely missing link between the Houthis’ cash revenue-generating schemes and extensive use of cryptocurrencies.
Converting Cash Into Crypto and Back with Foreign Facilitators
The Houthis’ international financial networks have become highly visible due to the transparent nature of blockchain ledgers and the group’s widespread use of cryptocurrencies. How the Houthis convert their cash proceeds into cryptocurrencies remains unknown, but a likely explanation comes from the growing nexus between hawala and crypto exchanges. In January, US authorities sentenced Indian national Anurag Pramod Muraka to more than ten years in prison for laundering over US $20 million in criminal proceeds using a combination of hawala networks and cryptocurrency transactions, starting with cash hidden in books and envelopes. The Houthis’ initial entry point into the global crypto system could stem from a similar Hawala-based scheme.
The Houthis have leveraged a variety of exchanges worldwide to evade sanctions. Garantex, a Russian crypto exchange founded in 2019 and sanctioned by OFAC in 2022, features prominently, receiving more than US $45 million in known transactions from identified Houthi networks. Moreover, an investigation by Chainalysis found that the al-Jamal network leveraged several mainstream exchanges in its crypto transactions, with cash-out points from these receiving more than US $200 million. At least one of these exchanges was located in Türkiye, possibly in connection to Iran-born and Türkiye-based money launderer Hasan Jafari. Jafari has previously arranged millions of dollars’ worth of payments in support of shipments benefiting the Houthis in connection with the al-Jamal network. The European Council sanctioned Garantex in February 2025, a first for the council. The exchange shut down on 7 March in response to concerted efforts by authorities in Europe and the United States.
Figure 2: Various exchanges and entities transfer cryptocurrencies on behalf of Ansar Allah. Source: Chainalysis
On 2 April, OFAC added eight cryptocurrency addresses to its Specially Designated Nationals (SDN) list, all of which were linked to Sa’id al-Jamal’s network. On 17 April, TRM labs announced they had identified nearly US $900 million in outflows across these eight addresses, which exist on the TRON network and received the majority of their funds in Tether (USDT). Further examination of these wallets and transactions reveals a complex network of global facilitators. Given al-Jamal’s Iran-based oil smuggling activities and Iran’s overt support for the Houthis, it is clear the network operates closely with Tehran’s top military leadership. The Houthis’ wielding of sophisticated Iranian weapons, including advanced drones and missiles, further denotes Iranian involvement at the financial and military levels.
Strong Evidence of Moscow’s Official Involvement
Evidence also suggests high-level Russian involvement at the financial and military levels. OFAC included several members of a Russia-based financing network as part of its 2 April sanctions. The network, including Afghan-born brothers Hushang and Sohrab Ghairat, reportedly procured millions of dollars’ worth of goods on behalf of the Houthis, with the latter using three Russian companies included in the sanctions. The Ghairat brothers reportedly worked with Türkiye-based Jafari, who was also designated in the sanctions. Acting under al-Jamal’s direction, the brothers facilitated payments to purchase Russian goods, including weapons and stolen Ukrainian grain, suggesting close ties to the Russian military and the country’s predominantly state-owned defence sector.
Garantex featured prominently in these transactions: the exchange reportedly maintained close ties to the Russian government and criminal groups before ceasing operations in March. Further evidence of high-level Russian involvement includes the provision of targeting data to assist the Houthis in their ongoing attacks and alleged talks between Houthi emissaries and notorious Russian arms dealer Viktor Bout, who maintains close ties to the Kremlin. Finally, US sanctions recently targeted three ships that reportedly carried Russian refined petroleum products to the Houthis in Yemen, providing more evidence of Russian facilitation.
Figure 3: A visual breakdown of the Russia-Yemen export scheme based on what we know.
Cambodia Connection and Questions Over Beijing’s Involvement
Evidence also suggests China’s financial and military involvement in Houthi Finances, although the ties are less clear, possibly due to Beijing’s efforts to avoid sanctions. Here is what we know:
Investigations by Elliptic show the al-Jamal network worked with Huione Pay, a Cambodian payments and foreign exchange business, via two-hop indirect transactions linked to over-the-counter (OTC) services in Yemen and elsewhere. When sanctioned entities transact in cryptocurrencies, they tend to avoid directly engaging with exchanges and payment processors to evade detection. For this reason, the sanctioned entity transacts through one or more intermediaries that ‘hop’ between licit and illicit vendors. Huione Pay transferred US $39 million in proceeds to the Houthis in one instance via an unknown virtual asset service provider (VASP). Beijing’s presence in Cambodia, and the country’s role as a haven for Chinese criminal activity, raises concerns, as does Huione’s ties to Chinese criminal groups and the country’s ruling family.
Cambodia is a longstanding haven for money laundering operations. Given the country’s widespread use of US dollars as a de-facto currency for foreigners and extensive blockchain ecosystem, it is a likely destination for converting illicit cash into cryptocurrencies, possibly in conjunction with hawala networks. Moreover, Chinese nationals form a large contingent of Cambodia’s criminal underworld, with alleged Chinese criminals extensively trading in Tether (USDT), the Houthis’ cryptocurrency of choice, despite the Cambodian government’s official ban.
Huione Pay is a division of the Cambodian conglomerate Huione Guarantee. The company provides legitimate services such as consumer payments as well as illegitimate ones, such as money laundering for criminal groups, specifically targeting Chinese syndicates. One of the company’s three top directors is a cousin of Cambodian President Hun Manet, whose family has ruled the country for decades while maintaining close economic and military ties to Beijing. The Chinese government and intelligence community also maintain close ties to criminal groups in Cambodia, including the 14K Triad, which routinely conducts covert political activities on Beijing’s behalf, with one of its senior leaders sitting on an official political advisory council in Beijing. Finally, according to US authorities, Huione Pay has served as a ‘critical node’ for laundering the proceeds of cyber heists carried out by criminal groups acting on behalf of North Korea, which maintains an official military alliance with China.
Other factors also signal Beijing’s support for the Houthis. On 17 April, the US State Department accused the Chinese firm Chang Guang Satellite Technology of directly supporting Houthi attacks on the Red Sea, although the company denied the claim. Similarly, officials working for the internationally recognised Yemeni government intercepted Chinese-manufactured hydrogen fuel cell components on their way to Houthi territories last August; it was reportedly the world’s first attempted use of hydrogen fuel in drone technology by a non-state actor. On 24 March, Yemeni authorities intercepted 800 Chinese-made drone propellers headed to Houthi territory from the Omani border. In this way, Beijing’s support for the Houthis, whether witting or unwitting, is increasingly difficult to deny.
Although these factors do not constitute a ‘smoking gun’ regarding Beijing’s financial facilitation of the Houthis via Huione, given other evidence of links between the two, they warrant further investigation. On 1 May, the US Treasury’s Financial Crimes Enforcement Network (FINCEN) issued a notice of proposed rulemaking (NRPM) regarding Huione, a first step toward official sanctions.
Figure 4: Example of a multi-hop transaction. In this case, Yinyin Tan, OFAC sanctioned for its support of North Korea’s Lazarus Group, deposited money in a legitimate cryptocurrency exchange via 11 hops to avoid detection. Source: Elliptic Investigator.
Figure 5: The Houthis’ Cambodian crypto connection raises many questions.
Recommendations
Whilst cryptocurrencies offer groups like the Houthis a means to evade sanctions, they also provide unprecedented transparency. In this way, blockchain analytics firms can work closely with law enforcement and other companies to improve the efficacy of measures aimed at stemming Houthi financial networks. Although these companies have provided significant research on Houthi transfers, cross-referencing this research with known information on global illicit finance could strengthen these efforts.
Blockchain researchers should work to identify further cases of the nexus between hawala and crypto exchanges, for example, by examining the entry point for wallet transfers between known locations in the Houthis’ crypto-based financial networks, such as Russia, Türkiye, and Cambodia. One or more of these locations may be where hawaladars convert Houthi cash proceeds into cryptocurrencies. Given the global reach of hawala networks, the international scope of these operations could be much broader. Countries that transact in high volumes of US dollars on a retail level, such as Cambodia and Ecuador, are excellent places to start. Neutralising these hawaladars is essential to stemming illicit cash flows into the global cryptocurrency market.
Uncovering further links between illicit financiers and state actors is essential to enforcing sanctions and stemming the flow of funds to the Houthis. When pressured, Beijing has shown a willingness to hold off on its purchase of illicit Iranian oil when it is demonstrably linked to Houthi finances. If researchers can demonstrate similar linkages, facilitating countries may show greater willingness to enforce compliance to reduce their exposure to sanctions.
China is much more dependent on global markets than Russia due to its economy’s high dependence on raw commodity imports and manufactured exports. Given China’s ongoing economic slowdown, Beijing may be even more risk-averse regarding sanctions than ever. In this way, finding any demonstrable links between the Houthis and actors with ties to the Chinese state, or any state, is essential to disrupting the group’s financial networks. Blockchain analysis firms are at the forefront of such research, especially as these firms continue to improve their analysis of multi-hop transactions.
Cryptocurrency exchanges should proactively adopt improved transparency measures, lest they fall victim to regulators. Recent examples of regulatory reforms in major markets include Nigeria and Türkiye, whose crackdowns have disrupted significant portions of terrorist financial operations. Global regulators have increasingly forced exchanges to comply with various anti-money laundering (AML) measures, including know-your-customer (KYC) standards, delivering harsh penalties for non-compliance. KYC standards can include identification and document checks, biometric verification, politically exposed person (PEP) and watchlist checks, and more. Such standards are essential for identifying illicit financial networks, such as those operated by the Houthis. As regulators continue to exert pressure, crypto exchanges would do well to adopt such measures before facing penalties for non-compliance in the future.
Finally, researchers, law enforcement agencies, and global governments should consider humanitarian needs in Yemen. Although the Houthis import deadly weapons, they also import vast quantities of food for their people, who are among the world’s poorest. Advocating for the provision of humanitarian aid to the population under Houthi control could reduce the group’s dependence on illicit financial networks for basic foodstuffs, many of which have been stolen from Ukraine. There are no easy answers regarding exerting pressure on the Houthis but starving Yemen’s civilian population should be viewed as an unacceptable outcome.
Adam Rousselle is a researcher focused on illicit finance, weapons technology, macroeconomics, geopolitics, and more. He has been featured in The Jamestown Foundation, The Hudson Institute, Nikkei Asia, The Wall Street Journal, and others. He is the co-founder of www.btl-research.com.