While stablecoins aim to maintain their stable value by being linked to fiat currencies, their growing presence in digital finance makes them central elements in the movement of funds within blockchain networks. They play a vital role in decentralized finance (DeFi), facilitating cross-border payments and helping maintain liquidity. Yet as their circulation has expanded, these same benefits have also attracted the attention of criminal networks, with stablecoins now beginning to replace Bitcoin as the preferred option for money laundering and associated illegal transfers.
In Brief
- The Financial Action Task Force (FATF) reported in June 2025 that the use of stablecoins by various illicit actors continues to increase and that the majority of illegal on-chain activities now involve these assets.
- By 2024, stablecoins accounted for approximately 63% of illicit cryptocurrency activity, overtaking Bitcoin as the preferred option for criminal transactions.
- Criminal networks exploit stablecoins for cross-border transfers and scams, often using unregulated platforms or over-the-counter markets to avoid surveillance.
The growing role of stablecoins in illicit transactions
An analysis by Chainalysis, a blockchain data company, found that although Bitcoin previously accounted for the majority of illicit cryptocurrency activity, stablecoins have now taken the lead. The company noted that these assets accounted for approximately 63% of illegal crypto transactions in 2024, marking a significant shift in the use of digital currencies for illicit financial movements.
Criminal networks are increasingly turning to stablecoins because they allow funds to be moved discreetly across borders without the logistical challenges and oversight common in traditional banking. These transactions often take place via unregulated foreign platforms or private over-the-counter (OTC) markets where identity checks are minimal.
On a local level, stablecoins have also been exploited in scams. In Korea, they have been linked to a scheme known as “Oda Jangjip”, in which scammers create fake ads on e-commerce platforms and second-hand to deceive buyers and steal their funds.
Stablecoins in global financial crime
International watchdogs are expressing growing concern over the growing misuse of stablecoins. In its June 2025 report, the Financial Action Task Force (FATF) stated that “The use of stablecoins by various illicit actors, including Democratic People's Republic of Korea (DPRK) actors, terrorist financiers, and drug traffickers, continues to increase since the 2024 targeted update, and the majority of on-chain illicit activities now involve stablecoins. » The organization added that wider adoption of virtual assets could further amplify the risks of financial crime on a global scale.
Similarly, the United Nations Office on Drugs and Crime (UNODC) observed in January 2024 that the Tether token (USDT) on the TRON blockchain became a privileged instrument for malicious actors in Southeast Asia involved in online fraud and money laundering, mainly due to its reliability and ease of transfer.
This widespread criminal use is facilitated by the underlying design of blockchain networks. Although transactions are recorded on public ledgers, they are linked to anonymous digital addresses rather than real identities, making it difficult to identify the holders of the funds.
Further complicating tracking is the use of mixers or mixers, which combine transactions from multiple users to obscure their origin. These pseudonymous and decentralized characteristics significantly weaken the surveillance mechanisms on which traditional financial systems rely.
Strengthening protection and surveillance
To reduce exposure to these risks, Chainalysis has issued several recommendations both for individual users and institutions handling stablecoins
- Individual users should always verify token contracts through official channels before any transfers, to ensure funds are sent to legitimate addresses.
- Furthermore, users are recommended to strengthen their wallet security by using hardware wallets for large balances and enabling multi-factor authentication to protect against unauthorized access.
- It is also important for users to remain vigilant against phishing campaigns aimed at stealing private keys or tricking them into approving transactions, as these attacks exploit security vulnerabilities.
- For organizations, effective risk management involves auditing smart contracts before adoption, continuously monitoring suspicious transactions, and maintaining systems that comply with anti-money laundering standards, including real-time filtering and identification of suspicious transfers.
Regulation and market outlook
Stablecoins are growing rapidly in global markets, even as countries refine their regulations to govern digital asset activity. Their market capitalization has now exceeded 313 billion dollarsreflecting strong and sustained demand.
US Treasury Secretary Scott Bessent highlighted the sector's strong growth potential, predicting that stablecoins could reach a total market value of $2 trillion in the next three years.
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