Iran’s proxy money machine: How the Houthis built a multibillion-dollar network despite US sanctions
The Houthis’ rapid advance toward one of the world’s most important shipping chokepoints is putting fresh scrutiny on the sprawling financial network that has helped transform the Iran-backed group from a Yemeni insurgency into a heavily armed regional power capable of threatening global trade.
The group has seized new territory along Yemen’s Red Sea coast, including the strategic port city of Mocha, and expanded toward the Bab el-Mandeb Strait. The waterway connects the Red Sea to the Gulf of Aden and carries a significant share of global maritime trade and energy shipments.
For the Trump administration, the Houthi advance is becoming as much a financial challenge as a military one. Washington is intensifying efforts to choke off the money sustaining Iran and its proxies, but the Houthis have built a sprawling sanctions-evasion network while controlling ports, trade routes and millions of Yemenis — raising a difficult question for Treasury: how do you cut off the cash fueling the group without cutting off food, fuel and other lifelines to civilians?
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The Houthis operate a financial network that extends far beyond Yemen, according to Adam Rousselle, founder of Between the Lines Research.
"We’re dealing with a very well-capitalized group," Rousselle told Fox News Digital.
In a 2025 investigation for the Global Network on Extremism and Technology, Rousselle traced a financing system spanning Houthi-controlled ports, tariffs, Iranian oil, informal hawala networks, cryptocurrency exchanges and foreign facilitators across Russia, Turkey and Southeast Asia.
Control of ports has historically been central to Houthi revenue because Yemen depends heavily on imports. Rousselle’s GNET report said the Houthis have imposed steep fees at ports they control and tariffs on goods brought into their territory from rival Yemeni ports.
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The group’s latest territorial gains could strengthen that economic base even further.
Nadwa Al-Dawsari, a Yemen expert and associate fellow at the Middle East Institute, told lawmakers in Sept. 1 testimony before the House Foreign Affairs Committee that territory is central to the Houthis’ ability to withstand outside pressure.
"The most important source of that leverage is territory," Al-Dawsari testified. "The Houthis have been able to consolidate their power and build increasingly sophisticated military capabilities because they control significant territory, a large population, ports, infrastructure, and resources."
"That territorial base allows them to recruit, generate revenue, manufacture and store weapons, control smuggling routes, and regenerate capabilities degraded by airstrikes and sanctions," she added.
Rousselle said the Houthis’ finances should not be understood simply as Tehran handing cash to an Iranian proxy.
"It’s a bit of a misunderstanding that the Iranians just give them money," he said, describing the Houthis instead as embedded in a broader Iranian commercial ecosystem.
"The Houthis aren't sanctions-proof; they're sanctions-adapted," Miad Maleki, senior fellow at the Foundation for Defense of Democracies, told Fox News Digital. "Most of their money is made inside Yemen — customs and taxes at Hodeidah and Ras Isa, and fuel above all."
Treasury has estimated that the Houthis generate more than $2 billion a year from oil sales, while Iran provides the group with a free monthly oil shipment through Iranian-owned or affiliated companies based in Dubai. Treasury has also documented Houthi revenue from taxes imposed on petroleum imports.
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"Sanctions can't reach domestic extraction," Maleki said. "What they can reach is the plumbing between Sana'a and the outside world; the exchange houses, the Dubai and Muscat correspondents, the tankers and the wallets."
At the center of that system is Sa’id al-Jamal, whom the Treasury Department has identified as an Iran-backed Houthi financial official operating an international network that sells Iranian commodities and channels proceeds toward the group.
Treasury said in April 2025 that al-Jamal’s network had procured tens of millions of dollars in weapons, sensitive goods and commodities from Russia and identified eight digital-asset wallets used by the Houthis. Blockchain analytics cited in Rousselle’s GNET research identified nearly $900 million in outflows across those addresses.
Rousselle cautioned against treating that figure as a complete picture of Houthi wealth.
"The system is more important than the number itself," he said, describing the network as fluid and difficult to quantify.
Russia, he argued, has become a particularly significant part of the network. "The Russians are definitely more hands-on in their support," Rousselle said.
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Al-Dawsari’s congressional testimony similarly highlighted the Houthis’ expanding relationships beyond Iran, saying the group is "deepening ties with other U.S. adversaries, particularly Russia and China."
She cited reports that Russia provided targeting data used to help the Houthis attack Western ships in the Red Sea and that Russian petroleum products were transferred ship-to-ship into a Houthi-controlled tanker before reaching the Houthi-controlled port of Ras Isa.
The China connection is more complicated. Rousselle said Chinese-linked private commercial actors appear in parts of the network but distinguished that activity from proven direct Chinese government involvement.
"The Chinese are kind of… turning a blind eye," he said.
His GNET report described Iranian oil flowing to privately owned Chinese "teapot" refineries and examined transactions linked to Southeast Asian financial networks, while cautioning that the available evidence did not establish direct Chinese government control of Houthi financing.
Al-Dawsari pointed to a broader Chinese role in Houthi supply chains. Citing U.S. officials, she said a Chinese satellite company with ties to the Chinese military provided satellite imagery supporting Houthi attacks against U.S. warships and international shipping. She also cited interdiction data showing that 60% of the components and materials used in the Houthi Qasef-2K drone came from China, compared with roughly 15% from Iran.
That sprawling network is now testing Treasury Secretary Scott Bessent’s broader effort to isolate Tehran economically and disrupt the financial channels sustaining Iran and its proxies.
Rousselle said decentralized illicit-finance networks present a fundamental challenge.
"You’re dealing with a ‘you shut down one, another pops up’ kind of situation," he said.
Maleki argued that Washington should concentrate on the points where Houthi money intersects with the formal financial system.
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"The soft spots are wherever Houthi money touches the formal system," he said. "Treasury has named the Yemeni banks and the Sana'a exchange houses that pay for missile components; it should now name the foreign correspondents still clearing for them. That is the one tool that changes behavior overnight."
Oman represents another potential pressure point. "Oman is the Houthis' land bridge and their mailing address," Maleki said.
But squeezing Houthi finances presents another dilemma: Yemen remains one of the world’s most fragile humanitarian environments, and the Houthis control ports and infrastructure through which civilians receive food, fuel and other basic goods.
"I would be lying if I had a concrete answer to it," Rousselle said when asked how Washington could disrupt Houthi revenue without worsening the humanitarian crisis.
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"The humanitarian argument is the Houthis' best shield, and it's backwards," Maleki said. "Food and medicine are licensed and should stay that way."
"Keep the goods flowing and take away the toll," he added, arguing that Washington should seek ways to prevent humanitarian trade from generating taxes and fees for Houthi authorities.
Rousselle warned that the challenge extends far beyond Yemen.
"This isn’t just about the Houthis," he said. "This is about any sanctioned actor worldwide capable of harnessing financial systems that are completely outside of regulatory control."
The Treasury Department did not immediately respond to Fox News Digital’s request for comment.