Stablecoins dominate illicit crypto flows at 84%

TLDR

Recent blockchain analytics show that stablecoins now account for around 84% of illicit crypto transaction volume, but only a small fraction of total stablecoin activity is illicit.

1. TRM Labs and Chainalysis data indicate stablecoins make roughly 8486% of identified illicit crypto flows in 2025, driven by a few large sanctions-linked networks.
2. Criminals prefer stablecoins because of price stability and liquidity, especially for sanctions evasion, laundering networks and illicit marketplaces, while scams often still start in BTC or ETH.
3. Illicit stablecoin flows are large in dollars but small as a share of total volume, and regulators are increasingly targeting stablecoin issuers and chokepoints like exchanges.

Deep Dive

1. What The 84% Figure Actually Means

Recent reports from blockchain analytics firms show a sharp concentration of crypto crime in stablecoins. TRM Labs found that in 2025 stablecoins made up about 86% of all illicit crypto flows, with illicit entities receiving roughly $141 billion in stablecoins that year, more than half via the ruble-pegged A7A5 token operating in sanctions-linked ecosystems. This is echoed by other analyses citing stablecoins at about 84% of identified illicit transactions in recent years. At the same time, TRM estimates total stablecoin transfer volume around $35 trillion in 2025, with illicit activity only about 0.4% of that total, meaning the vast majority of stablecoin usage is legitimate.

2. Why Illicit Actors Use Stablecoins

Stablecoins offer three features criminals value: price stability, deep liquidity, and fast, cross-border settlement. TRM and Chainalysis highlight that sanctions-evasion networks, guarantee marketplaces, and professional laundering services now rely almost entirely on stablecoins, with some services seeing 99% of volume in stablecoins. Illicit goods, services, and human trafficking networks also show near-total stablecoin usage, because participants care more about predictable payment value than speculative upside. By contrast, scams, hacks, and ransomware often initially receive Bitcoin or Ether, then convert into stablecoins during the laundering phase to preserve value while funds are moved through mixers, OTC brokers, or high-risk exchanges.

3. Scale, Risk And The Policy Response

Even though $141 billion in illicit stablecoin flows is material, it sits against tens of trillions in total stablecoin volume, so illicit use is a small percentage of activity. TRM notes that this ratio is still below typical estimates for global money laundering relative to traditional finance. However, regulators see stablecoins as a key chokepoint because issuers can freeze tokens and compliant exchanges can block cash outs. Recent actions include EU proposals that explicitly target stablecoin rails used by Russia, and public figures showing Tether has frozen billions of USDT linked to illicit activity. At the same time, law enforcement warns that if controls only bite on regulated venues, flows can migrate to offshore platforms and less visible ecosystems.

Conclusion

Stablecoins now dominate the composition of known illicit crypto flows because they are the most convenient settlement rail, not because most stablecoin usage is criminal. For crypto users and builders, the key trend is growing regulatory focus on stablecoin issuers and high-risk intermediaries, which could tighten compliance on major rails while pushing some activity to more opaque corners of the market.