Illegal cryptocurrencies and associated crime reached a record level in 2025. Their addresses received at least 154 billion USD in total. This represents a 162% year-on-year increase, according to a new report by the analytics firm Chainalysis.
The dramatic increase was primarily due to a 694% surge in fund flows to entities subject to sanctions. Chainalysis indicates this marks a new era of "large-scale state-sponsored activities" in the world of cryptocurrency crime.
Illegal Cryptocurrencies: From Cybercriminals to National Governments
The report describes 2025 as the third wave of cryptocurrency crime evolution. The first wave (2009-2019) involved niche cybercriminals. The second wave (2020-2024) brought professionalization of criminal organizations that built on-chain infrastructure. Now the third wave has arrived—national governments are entering the market en masse to circumvent international sanctions.
When national governments connect to illicit cryptocurrency supply chains—originally built by cybercriminals and criminal organizations—government agencies and compliance and security teams must face higher stakes regarding both consumer protection and national security.
Russia launched its stablecoin A7A5, linked to the ruble, in February 2025. Transaction value exceeded 93.3 billion USD in less than a year. Earlier, in 2024, regulations were passed specifically designed to facilitate circumventing sanctions through cryptocurrencies.
North Korean hackers had their most destructive year in history and stole 2 billion USD in 2025 alone. February brought a massive attack on Bybit, during which nearly 1.5 billion USD was stolen—this is the largest digital heist in cryptocurrency history.
Iran-linked intermediary networks enabled laundering of over 2 billion USD, illegal oil sales, and weapons purchases through wallets listed under sanctions. Iran-backed organizations, including Hezbollah, Hamas, and Houthi, are using cryptocurrencies on an unprecedented scale.
Stablecoins: The New Currency of Criminals
One of the most significant changes revealed by the data is the dramatic shift in the assets preferred by criminals.
In 2020, Bitcoin accounted for about 70% of illicit transactions, while stablecoins made up only 15%. By 2025, the situation reversed: stablecoins now account for 84% of illicit transaction volume, while Bitcoin dropped to around 7%.
Chainalysis explains this shift through practical advantages of stablecoins: ease of cross-border transfers, lower volatility, and greater utility. This trend reflects legitimate uses of cryptocurrencies, where stablecoins represent an increasingly larger share of total transaction volume.
Chinese money laundering networks
The report highlights the emergence of Chinese money laundering networks (CMLNs) as the dominant force in the criminal world. Based on solutions developed by Huione Guarantee, these structures now offer 'laundering as a service' and specialized criminal infrastructure.
These comprehensive services support everything—from fraud and money laundering to North Korean attacks, sanctions evasion, and terrorism financing.
Chainalysis also warns of the growing link between on-chain activity and violent crime. Human trafficking operations are increasingly using cryptocurrencies, and 'violent attacks,' where criminals force victims to transfer funds, are rising sharply and often coincide with cryptocurrency price peaks.
Despite record levels, Chainalysis notes that illicit activity still accounts for less than 1% of the total cryptocurrency transaction volume. The company also emphasizes that the 154 billion USD figure is a 'conservative minimum' based on addresses detected so far.
Historical data shows that cryptocurrency crime does not always increase: volumes dropped from 56 billion USD in 2022 to 50 billion USD in 2023 during the industry crisis. The 2025 surge, however, marks a fundamental shift in the situation. Chainalysis summarizes, urging closer cooperation among law enforcement agencies, regulatory bodies, and cryptocurrency companies:
Although illicit activity still represents a small fraction compared to legitimate cryptocurrency use, the stakes in the fight for the integrity and security of the cryptocurrency ecosystem have never been higher.
To access the latest cryptocurrency market analysis from BeInCrypto, click here.
