60% of Illicit Crypto Activity in 2024 Linked to Stablecoins: TRM Labs

A new report from blockchain analytics firm TRM Labs highlights a key paradox in crypto: while stablecoins have become the preferred tool for illicit actors, this criminal activity represents just a tiny fraction of their overall use. The report emphasizes that while criminals favor stablecoins for their speed and stability, over 99% of all stablecoin volume in 2024 was legitimate.

This dual nature is central to the current debate around stablecoin regulation, including the recently passed GENIUS Act in the U.S. Senate.

The Dark Side: Why Criminals Prefer Stablecoins

According to TRM Labs' analysis of the first quarter of 2025, stablecoins were involved in approximately 60% of all illicit crypto transaction volume. Their stable value, pegged to currencies like the U.S. dollar, makes them ideal for money laundering, terrorist financing, and sanctions evasion, as they avoid the price volatility of assets like Bitcoin.

This dominance in the illicit sphere has made them a prime target for regulators worldwide.

The Bigger Picture: A Different Story 

However, focusing only on illicit use misses the much larger context. The same research found that the vast majority of stablecoin activity is legitimate. The most popular use cases include:

• Participation in Decentralized Finance (DeFi)
• E-commerce payments
• Cross-border transactions and remittances

Furthermore, the overall crypto crime landscape is shrinking relative to the market's explosive growth. While total crypto transaction volume topped $10.6 trillion in 2024 (a 56% increase from 2023), the volume of illicit transactions fell to just 0.4% of the total, down from $21.9 billion in 2023 to $14.8 billion in 2024. Most of these illicit funds came from sanctioned entities like the Russian exchange Garantex and Iranian exchange Nobitex.

Traceability and Regulation

Despite their use in illicit finance, TRM Labs argues that stablecoins have powerful, built-in defense mechanisms.

Although stablecoins have been misused for illicit purposes due to their speed and liquidity, their traceability on public blockchains enables law enforcement and compliance teams to detect and disrupt criminal activity,

says TRM. 

Beyond public traceability, major issuers like Tether (USDT) and Circle (USDC) also have the ability to freeze and burn tokens involved in criminal activity.

Upcoming legislation like the GENIUS Act, recently passed by the US Senate, is expected to further bolster these defenses. The bill calls for stronger coordination between government agencies to combat money laundering and sanctions evasion, aligning with the goals of international bodies like the FATF.