SANAA — The Houthis have established a cryptocurrency-based financial network that utilizes Yemen's telecommunications infrastructure to circumvent financial sanctions and fund military operations, according to a UN Panel of Experts report submitted to the Security Council in October 2025.

Amin Jameel, a digital analysis and networks engineer, said the Houthis rely on the TRON network and the stablecoin Tether (USDT). This choice is driven by low transaction costs and high processing speed compared with the Bitcoin network, he said.

Tether's peg to the US dollar helps protect funds from cryptocurrency market volatility, Jameel added. He described the laundering cycle as comprising three technical stages. The first stage involves receiving transfers via temporary digital addresses that are regularly created and rotated, while the second stage routes funds through exchanges with limited regulatory oversight or platforms without strict identity verification. The third stage involves converting digital tokens into cash in local or foreign currencies on the ground, where exchange networks distribute the cash to support frontlines, purchase weapons, or acquire real estate and foreign citizenships for Houthis abroad.

A technical officer at YemenNet, the public telecommunications company in Sanaa, said the Houthis directly exploit the company's infrastructure and servers for Bitcoin and cryptocurrency mining operations. These mining operations benefit influential figures and Houthi entities, the officer said. The use of network resources for mining has strained Yemen's telecommunications infrastructure, resulting in deteriorated internet quality and slow connection speeds within Yemen. Electricity originally allocated for telecommunications infrastructure has been diverted to power these mining facilities.

Faheem Hassan, a local cryptocurrency broker and trader in Sanaa, said the Houthis have imposed strict oversight on the digital wallets of businesspeople and local traders in areas under their control. Local traders are subjected to extortion, forced to pay levies, and surrender portions of their profits under threats of asset confiscation or arrest. He also stated that the Houthis possess extensive information about local traders in the cryptocurrency market.

Reports from international media indicate that the Houthis have imposed safety fees on certain cargo vessels, shipping agents, and insurance companies in exchange for guarantees that vessels will not be targeted by drones or missiles. Payments for these fees are required to be transferred directly to temporary digital wallets. The UN report stated that financial sanctions had limited effectiveness against the Houthis due to their reliance on alternative channels and smuggling networks, and noted that the group maintains complete control over Yemen's telecommunications sector.