Inner Circle Briefing I: Shadow Finance, Stablecoins, and the Future of Conflict

The financial frontier of modern conflict isn’t just on-chain—it’s embedded in gray networks, proxy intermediaries, and stablecoins governments can’t stop.

Executive Summary

This briefing draws on recent investigations conducted by Between the Lines Research and intersects with blockchain analytics firms public-sector and regional priorities. It outlines how sanctioned states and affiliated actors are constructing adaptive informal financial infrastructures to bypass AML/KYC enforcement, using stablecoins (especially USDT on TRON), OTC brokers, shell firms, and hybrid cash-crypto settlement systems. The goal is to provide typologies and behavioral insight that can enhance public-private threat finance collaboration and complement on-chain attribution efforts.

This briefing synthesizes findings from three recent investigations:

· Iran’s asymmetric crypto finance architecture

· China's informal capital networks and global laundering architecture

· Hezbollah-linked activity in Latin America

· Houthi oil and stablecoin laundering ecosystems

Each section includes behavioral patterns, regional risk zones, and key implications for compliance, tracing, and enforcement.