Illicit Stablecoin Use Grows But Declines in Percentage
Stablecoins are increasingly used in illegal activities, but the growth of legitimate transactions outpaces criminal ones, according to the Bitrace 2025 report.
A new report from Bitrace reveals a worrying trend in the cryptocurrency landscape: stablecoins are experiencing an escalation in their use for illegal activities, according to the latest findings.
According to the Crypto Crime Report 2025, high-risk addresses received $649 billion in stablecoin transfers in the previous year. The total amount of stablecoin used in fraudulent activities and money laundering operations has increased.
However, the report also presents an element of hope: despite the increase in illicit volume, the proportion of these transactions to total stablecoin transactions has decreased.
Cryptocurrency Use in Crime: Source Onchain Foundation
The 2024 data shows that 5.14% of the total stablecoin volume was related to illicit transactions, down from 5.94% recorded in 2023. The legitimate use of stablecoins continues to grow at a faster rate than illicit use.
Tether (USDT), the market-leading stablecoin, accounts for the largest share of these illicit transactions. The blockchains of Tron and Ethereum remain the main networks used for illegal USDT transfers, accounting for around 90% of the crime-related volume. Ethereum has increased its incidence in illicit activities compared to Tron, although the latter still handles over 75 per cent of criminal transactions.
"Stablecoins and Crime in Crypto. 1/ As of 2022, stablecoins have replaced the Bitcoin as the currency of choice for illicit transactions," stated Onchain Foundation on X (formerly Twitter).
The Bitrace report also examines other aspects of crypto crime beyond stablecoins. Illegal transactions on darknet marketplaces grew by more than $30 billion as sellers turned to Decentralised Finance (DeFi) to evade authorities. Gambling in crypto also grew by 17.5 per cent, reaching a market value of $217.84 billion.
According to the report, scams and fraud in the crypto space have increased alarmingly, from $12 billion in 2023 to $52 billion in 2024.
Regulators and industry leaders are stepping up efforts to counter the illegal use of stablecoins. Tether and Circle have stepped up their interventions, freezing more than $1 billion worth of assets linked to criminal activity in the past year.
The total funds frozen this year is double the amount frozen in the previous three years, a sign of a stronger commitment to combating money laundering. Although the recovered funds represent only a small fraction of the total illicit transactions, their seizure represents significant progress.
The report highlights how stablecoins are key elements of the entire crypto ecosystem, involved in both licit and illicit activities. Investigator ZachXBT's findings on the North Korean hackers offer further evidence to this effect.
The Bitrace report's findings show that stablecoins continue to play a central role in cryptocurrency-related crimes, but that the expansion of the legitimate market and increased enforcement efforts point to positive prospects. Strengthening efforts and developing sophisticated strategies to combat fraud and money laundering can significantly reduce the criminal use of digital assets. The dominance of legitimate applications over illicit ones points to a cleaner and more trustworthy future crypto ecosystem.
Former CFO Nevin Shetty was convicted of fraud after surreptitiously transferring $35 million of the company's money to his DeFi platform, losing almost all of it in Terra's collapse in 2022. Here is how the scheme happened and what happens now.
Tether moves like a sovereign wealth fund: it hires traders from HSBC and accumulates billions in physical gold. The strategy, which mirrors the behaviour of central banks, marks a break from dependence on the US dollar.
A new report from Bitrace reveals a worrying trend in the cryptocurrency landscape: stablecoins are experiencing an escalation in their use for illegal activities, according to the latest findings.
According to the Crypto Crime Report 2025, high-risk addresses received $649 billion in stablecoin transfers in the previous year. The total amount of stablecoin used in fraudulent activities and money laundering operations has increased.
However, the report also presents an element of hope: despite the increase in illicit volume, the proportion of these transactions to total stablecoin transactions has decreased.
The 2024 data shows that 5.14% of the total stablecoin volume was related to illicit transactions, down from 5.94% recorded in 2023. The legitimate use of stablecoins continues to grow at a faster rate than illicit use.
Tether (USDT), the market-leading stablecoin, accounts for the largest share of these illicit transactions. The blockchains of Tron and Ethereum remain the main networks used for illegal USDT transfers, accounting for around 90% of the crime-related volume. Ethereum has increased its incidence in illicit activities compared to Tron, although the latter still handles over 75 per cent of criminal transactions.
The Bitrace report also examines other aspects of crypto crime beyond stablecoins. Illegal transactions on darknet marketplaces grew by more than $30 billion as sellers turned to Decentralised Finance (DeFi) to evade authorities. Gambling in crypto also grew by 17.5 per cent, reaching a market value of $217.84 billion.
According to the report, scams and fraud in the crypto space have increased alarmingly, from $12 billion in 2023 to $52 billion in 2024.
Regulators and industry leaders are stepping up efforts to counter the illegal use of stablecoins. Tether and Circle have stepped up their interventions, freezing more than $1 billion worth of assets linked to criminal activity in the past year.
The total funds frozen this year is double the amount frozen in the previous three years, a sign of a stronger commitment to combating money laundering. Although the recovered funds represent only a small fraction of the total illicit transactions, their seizure represents significant progress.
The report highlights how stablecoins are key elements of the entire crypto ecosystem, involved in both licit and illicit activities. Investigator ZachXBT's findings on the North Korean hackers offer further evidence to this effect.
The Bitrace report's findings show that stablecoins continue to play a central role in cryptocurrency-related crimes, but that the expansion of the legitimate market and increased enforcement efforts point to positive prospects. Strengthening efforts and developing sophisticated strategies to combat fraud and money laundering can significantly reduce the criminal use of digital assets. The dominance of legitimate applications over illicit ones points to a cleaner and more trustworthy future crypto ecosystem.
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