Study finds illicit crypto below 1%

TLDR

Recent research finds that known illicit crypto activity accounts for under 1% of on?chain transaction volume, even as total dollar amounts in crime remain very large.

1. A Binance Research study using Chainalysis data estimates illicit on?chain activity below 1% of 2025 crypto volume, with TRM Labs putting it near 1.2%.
2. In absolute terms, criminals still moved around $150 billion in crypto in 2025, with groups like North Koreas Lazarus stealing billions through hacks and exploits.
3. Improved blockchain analytics, freezes, and law enforcement cooperation are shrinking crimes share of activity, but gaps in detection and regulation remain important to watch.

Deep Dive

1. What Below 1% Actually Means

The new Binance Research report, drawing on Chainalysis data, estimates that addresses linked to crime made up less than 1% of total on?chain crypto transaction volume in 2025, even as the market grew into the multi?trillion dollar range. A separate TRM Labs estimate is similar, putting illicit activity at about 1.2% in 2025, down from 1.3% in 2024, suggesting the share of criminal use is slowly trending lower.

This figure is specifically about on?chain volume that analytics firms can attribute to clearly illicit categories such as scams, hacks, darknet markets, and sanctioned entities. It does not say that crime has disappeared, only that most blockchain usage today is trading, payments, stablecoins, DeFi, and institutional flows.

2. Crime Is Small Percentage, Big Money

Despite a sub?1% share, the absolute size is large. Chainalysis data cited in the report suggests illicit wallets received over about $154 billion of crypto in 2025, with over $75 billion sitting in identified illicit balances, up roughly 28% from 2024. TRM Labs separately estimates total illicit flows around $158 billion in 2025.

A major share is driven by advanced actors like North Koreas Lazarus Group, which reportedly stole around $2.02 billion in 2025 alone and has cumulatively taken more than $6.7 billion through exchange and bridge hacks. That means crypto crime is financially and geopolitically significant, even if it is a minority of network usage.

3. Why The Share Is Low And What To Watch

The low percentage is partly because blockchains are transparent and monitored. The report credits widespread Know Your Transaction tools, blacklisting and freezing of stablecoins, and closer collaboration between exchanges, analytics firms, and law enforcement. For example, specialized units linked to Tether, Tron, and TRM Labs report freezing hundreds of millions of dollars in suspicious assets across many jurisdictions.

At the same time, these numbers only cover crime that has been detected and labeled. Some illicit activity may remain untagged or occur off chain around fiat on? and off?ramps. The key things to watch are continued improvements in analytics coverage, the pace of large hacks, and how regulators treat the less than 1% statistic when shaping policy.

Conclusion

Illicit crypto usage appears to be a small fraction of on?chain volume, yet it still represents tens of billions of dollars and some of the most sophisticated financial crime globally. For cryptos long?term adoption and regulation, the combination of transparent ledgers plus stronger monitoring is a key advantage, provided the industry keeps closing detection gaps while preserving the utility that makes people want to use public blockchains in the first place.