The Sephardi minhagim and nuschaot entered Chassidus primarily through the works of the Arizal, who himself was the son of an Ashkenazi father and a Sephardi mother. That also led to affinity between the Sephardi Mukubalim and Chassidus. The Abuhatzerah dynasty is one prominent example. דרך אגב, most “Sephardim” today (Iraqi, Persian, most Syrian, most Moroccan, most Tunisian) are not at all descended from “Sepharad”, and are more accurately referred to as “Edot Hamizrach” (except that geographically Morocco is Edot Hamaarav…) Iraqi, Persian, and Yemenite Jews were there for the most part since חורבן בית ראשון. (Yemenis have their own unique and ancient minhagim, and their Halachot are based largely on the Rambam.) Rav Ovadiah Yosef (himself Iraqi/Bavli) was asked by Juan Carlos, the former King of Spain, why those communities refer to themselves as “Sephardim”. He answered that the name “Sephardim” was adopted by all communities who accepted the Beit Yosef/Mechaber (who was in fact “Sephardi”) as their final authority in Halacha.
