$649B STABLECOIN TRANSFERS LINKED TO ILLICIT ACTIVITY IN 2024: REPORT

The world of cryptocurrency, while promising innovation and financial freedom, is not immune to the shadows of illicit activities.A recent report by cryptocurrency compliance firm Bitrace has brought to light a concerning statistic: a staggering $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025.This substantial figure, representing approximately 5.14% of all stablecoin transaction volume for that year, serves as a stark reminder of the challenges in maintaining the integrity and security of the digital asset ecosystem. cointelegraph.com: Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.Bitrace defines high-risk blockchain addresses as those used by illegal entities to receive, transfer or store stablecoins.Crypto compliance firms typically score crypto wallet addresses based on theirBut what exactly constitutes a ""high-risk"" address, and what implications does this have for the broader crypto market?Is this a sign of increasing criminal involvement in crypto, or simply a reflection of the growing volume of transactions?And more importantly, what measures can be taken to mitigate this risk and ensure a safer environment for legitimate users?This report dives deep into the findings of Bitrace, exploring the nuances of crypto crime trends, the ongoing efforts to combat illicit activity, and the future of stablecoin regulation in an increasingly complex digital landscape.We'll explore the definition of ""high-risk"", unpack the factors contributing to this alarming statistic, and analyze the potential consequences for investors, regulators, and the future of decentralized finance (DeFi).

Understanding the Scope of Illicit Stablecoin Transfers

The Bitrace report paints a concerning picture, but it's crucial to understand the context surrounding the $649 billion figure.Let's break down the key elements:

• The Figure: $649 billion in stablecoin transfers linked to illicit activity.
• The Percentage: 5.14% of total stablecoin transaction volume in 2025.
• The Source: A report by cryptocurrency compliance firm Bitrace.
• The Year: 2025.

Bitrace defines high-risk blockchain addresses as those used by illegal entities to receive, transfer, or store stablecoins.These addresses are often associated with activities such as:

• Money laundering
• Terrorist financing
• Drug trafficking
• Sanctions evasion
• Cybercrime
• Fraudulent schemes

The fact that over $649 billion in stablecoins moved through these addresses highlights the challenges of combating financial crime in the decentralized world of cryptocurrency.While the 5.14% figure might seem small, the sheer volume of funds involved is significant and demands attention from regulators, exchanges, and the broader crypto community.

Comparing to Previous Years

While $649 billion is a substantial number, it's essential to examine how this figure compares to previous years to identify any trends.The Bitrace report indicates that while the percentage of illicit stablecoin transfers has decreased slightly from 2025 (5.94%), it's still significantly higher than in earlier years:

• 2025: 5.94%
• 2025: 5.14%
• 2025: 2.8%
• 2025: 1.63%

This data suggests a concerning upward trend in illicit stablecoin activity, despite the slight decrease in 2025. Bitrace reported that $649 billion about 5.14% of all stablecoin transactions in 2025 flowed through high-risk addresses linked to illicit activities. Related articles El Salvador stacks 7 Bitcoin in last week, despite IMF dealThis could be attributed to several factors, including the increasing adoption of stablecoins, the sophistication of criminal actors, and the challenges of tracking illicit transactions across decentralized networks.

The Role of Stablecoins in Facilitating Illicit Activities

Stablecoins, cryptocurrencies pegged to a stable asset like the US dollar, have become increasingly popular in the crypto ecosystem.Their stability makes them ideal for trading, lending, and payments.However, this same stability also makes them attractive to criminals seeking to move funds without the volatility associated with other cryptocurrencies.

Here's why stablecoins are often preferred for illicit activities:

• Price Stability: Stablecoins offer a more predictable value compared to volatile cryptocurrencies like Bitcoin, making them easier to use for illicit transactions.
• Ease of Use: Stablecoins are readily available on most cryptocurrency exchanges and can be easily transferred between wallets.
• Pseudonymity: While transactions are recorded on the blockchain, identifying the individuals behind the wallets can be challenging.
• Global Reach: Stablecoins can be transferred across borders quickly and easily, facilitating international money laundering and other illicit activities.

It's important to note that stablecoins are not inherently malicious.The vast majority of stablecoin transactions are legitimate and contribute to the growth of the DeFi ecosystem. A new report by blockchain compliance firm Bitrace has revealed that $649 billion in stablecoin transactions passed through high-risk addresses in 2025.However, the characteristics that make them useful for legitimate purposes also make them vulnerable to misuse by criminals.

Bitrace's Methodology for Identifying High-Risk Addresses

Understanding how Bitrace identifies ""high-risk"" addresses is crucial to interpreting the report's findings. Per the report, the amount accounted for roughly 5.14% of all stablecoin transaction volume in 2025. This is down 0.8% from 5.94% the previous year, but significantly higher than the 2.8% reported in 2025 and 1.63% in 2025. Proportion of high-risk stablecoin transactions. Source: Bitrace. Related: Americans lost $9.3B to crypto fraud in 2025While the specific methodology is proprietary, Bitrace likely uses a combination of on-chain and off-chain data to assess the risk associated with a particular address.This may include:

• Transaction History: Analyzing the addresses that have interacted with a particular wallet to identify patterns of suspicious activity.
• Link Analysis: Mapping the relationships between different addresses to uncover networks of illicit actors.
• Regulatory Watchlists: Cross-referencing addresses against lists of sanctioned individuals and entities.
• Law Enforcement Data: Incorporating information from law enforcement agencies to identify addresses involved in criminal investigations.
• Open-Source Intelligence (OSINT): Gathering information from publicly available sources, such as news articles and social media, to identify addresses associated with illicit activities.

Crypto compliance firms typically score crypto wallet addresses based on their likelihood of being involved in illicit activity. FLOWUSD Flow $649B stablecoin transfers linked to illicit activity in 2025: Report Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.Bitrace defines high-riskThis scoring system helps exchanges and other crypto businesses to identify and mitigate risks associated with high-risk addresses. A report by Bitrace revealed that in 2025, approximately $649 billion worth of stablecoin transactions, making up about 5.14% of the total stablecoin transaction volume, were associated with high-risk addresses linked to illicit activities. This figure is a decrease from 5.94% in 2025, but significantly higher than 2.The goal is to flag potentially problematic transactions and prevent them from being processed, thereby disrupting illicit financial flows.

The Impact on the Crypto Ecosystem and Potential Consequences

The high volume of stablecoin transfers linked to illicit activity has significant implications for the crypto ecosystem.It can:

• Damage the Reputation of Stablecoins: The association with illicit activity can erode trust in stablecoins and hinder their adoption.
• Attract Regulatory Scrutiny: Governments and regulators are increasingly focused on combating money laundering and other financial crimes in the crypto space. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report. Bitrace defines high-risk blockchain addresses as those used by illegal entities to receive, transfer or store stablecoins. Crypto compliance firms typically score crypto wallet addresses based on their likelihood ofThe high volume of illicit stablecoin transfers is likely to trigger increased regulatory scrutiny and potentially lead to stricter regulations.
• Increase Compliance Costs: Cryptocurrency exchanges and other businesses that handle stablecoins may need to invest in more sophisticated compliance systems to detect and prevent illicit activity.
• Hinder Innovation: Overly restrictive regulations could stifle innovation in the crypto space and limit the potential benefits of stablecoins.

Therefore, it's crucial for the crypto industry to proactively address the issue of illicit stablecoin transfers. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.Bitrace defines high-risk blockchain addresses as those used by illegal entities to receive, transfer or store stablecoins.Crypto compliance firms typically score crypto wallet addresses based onThis requires a collaborative effort involving exchanges, stablecoin issuers, compliance firms, and regulators.

Strategies for Combating Illicit Stablecoin Activity

Combating illicit stablecoin activity requires a multi-faceted approach that combines technological solutions, regulatory frameworks, and industry best practices.Here are some key strategies:

Enhanced Compliance Measures

Cryptocurrency exchanges and other businesses that handle stablecoins need to implement robust compliance programs that include:

• Know Your Customer (KYC) procedures: Verifying the identities of customers to prevent anonymous transactions.
• Anti-Money Laundering (AML) monitoring: Screening transactions for suspicious activity and reporting it to the authorities.
• Transaction monitoring: Continuously monitoring transactions for unusual patterns or high-risk addresses.
• Sanctions screening: Ensuring that transactions do not involve sanctioned individuals or entities.

Blockchain Analytics and Forensic Tools

Blockchain analytics and forensic tools can help to trace illicit stablecoin transactions and identify the individuals behind them.These tools use advanced algorithms and machine learning to analyze on-chain data and uncover patterns of suspicious activity. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk inThey allow investigators to:

• Trace the flow of funds through the blockchain.
• Identify high-risk addresses and entities.
• Uncover hidden relationships between different addresses.
• Attribute transactions to specific individuals or groups.

Collaboration with Law Enforcement

Collaboration between the crypto industry and law enforcement agencies is essential for combating illicit stablecoin activity.Exchanges and compliance firms can provide law enforcement with valuable information about suspicious transactions and help them to track down criminals. A new report reveals $649 billion in stablecoin transfers linked to illicit activity in 2025, representing 5.14% of total volume. Learn more about crypto crime trends.Law enforcement agencies can, in turn, provide the industry with intelligence about emerging threats and trends.

Regulatory Clarity and Frameworks

Clear and consistent regulations are needed to provide a framework for the responsible use of stablecoins. Per the report, the amount accounted for roughly 5.14% of all stablecoin transaction volume in 2025. This is down 0.8% from 5.94% the previous year, but significantly higher than the 2.8% reported in 2025 and 1.63% in 2025.Regulations should address issues such as:

• Licensing and registration: Requiring stablecoin issuers and exchanges to obtain licenses and register with regulators.
• Capital requirements: Ensuring that stablecoin issuers hold sufficient reserves to back their stablecoins.
• AML/KYC requirements: Mandating robust AML/KYC procedures for all stablecoin transactions.
• Oversight and enforcement: Providing regulators with the authority to oversee the stablecoin market and enforce regulations.

Educating Users and Promoting Awareness

Raising awareness among users about the risks associated with illicit stablecoin activity can help to prevent them from becoming victims of scams or unwittingly facilitating criminal activity.Education efforts should focus on:

• Identifying and avoiding scams.
• Understanding the risks of using unregulated exchanges.
• Reporting suspicious activity to the authorities.
• Practicing good cybersecurity habits to protect their wallets and private keys.

The Role of Regulation in the Future of Stablecoins

The future of stablecoins is inextricably linked to regulation. ETHUSD Ethereum $649B stablecoin transfers linked to illicit activity in 2025: Report Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.Bitrace defines high-riskAs stablecoins become more widely adopted, regulators around the world are grappling with how to balance the benefits of innovation with the need to protect consumers and prevent illicit activity.

The approach to stablecoin regulation varies across different jurisdictions. This concept of regulated stablecoin activity will capture the issuance of a specified stablecoin in Hong Kong or a HKD-referenced stablecoin outside of Hong Kong in the course of business. The LegCo Reports note that the HKMA will issue guidelines on the factors it will consider in determining whether a specified stablecoin is issuedSome countries have adopted a more permissive approach, while others have taken a more cautious stance.However, there is a growing consensus that some form of regulation is necessary to ensure the stability and integrity of the stablecoin market.

For example, the LegCo Reports note that the HKMA will issue guidelines on the factors it will consider in determining whether a specified stablecoin is issued. Bitrace reported that $649 billion about 5.14% of all stablecoin transactions in 2025 flowed through high-risk addresses linkedThis concept of regulated stablecoin activity will capture the issuance of a specified stablecoin in Hong Kong or a HKD-referenced stablecoin outside of Hong Kong in the course of business.

The key is to strike a balance between fostering innovation and mitigating risks.Regulations should be tailored to the specific characteristics of stablecoins and should avoid stifling the growth of the DeFi ecosystem.

Examples of Illicit Activities Involving Stablecoins

To better understand the issue, let's look at some real-world examples of how stablecoins are used in illicit activities:

• Money Laundering: Criminals use stablecoins to launder the proceeds of illegal activities, such as drug trafficking and fraud. Still, USDC s market share is rapidly rising, clocking in at 13.36% in 2025. Stablecoin inflows to gambling platforms. Source: Bitrue. The data follows recent reports that crypto casinos generated more than $81 billion in revenue in 2025, even as regulators in key jurisdictions continued to block access to the platforms, according to a newThey may convert illicit funds into stablecoins, transfer them through a series of anonymous wallets, and then convert them back into fiat currency.
• Sanctions Evasion: Sanctioned individuals and entities may use stablecoins to evade economic sanctions. Per the report, the amount accounted for roughly 5.14% of all stablecoin transaction volume in 2025. This is down 0.8% from 5.94% the previous year, but significantly higher than the 2.8% reportedThey can use stablecoins to make payments to businesses in sanctioned countries or to move funds through the international financial system without being detected.
• Terrorist Financing: Terrorist organizations may use stablecoins to finance their operations. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.Bitrace defines highStablecoins can be used to raise funds, pay for weapons and supplies, and transfer funds to fighters in conflict zones.
• Cybercrime: Cybercriminals may demand ransom payments in stablecoins.This allows them to receive payments quickly and anonymously.
• Fraudulent Schemes: Scammers may use stablecoins to conduct fraudulent schemes, such as Ponzi schemes and pyramid schemes.They may promise investors high returns on their investments but then steal their money.

These examples illustrate the diverse ways in which stablecoins can be used to facilitate illicit activities. Tech. $649B stablecoin transfers linked to illicit activity in 2025: Report. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.It's important for users to be aware of these risks and to take steps to protect themselves.

Conclusion: Navigating the Future of Stablecoins with Vigilance

The Bitrace report's revelation of $649 billion in stablecoin transfers linked to illicit activity in 2025 serves as a crucial wake-up call for the crypto industry. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report.Bitrace defines high-riWhile the slight decrease from the previous year is encouraging, the sheer magnitude of the figure underscores the ongoing need for robust compliance measures and proactive efforts to combat financial crime in the digital asset space.The stability and ease of use that make stablecoins attractive for legitimate transactions also make them vulnerable to misuse by criminals.Addressing this challenge requires a collaborative approach involving exchanges, stablecoin issuers, compliance firms, regulators, and users. Cryptocurrency compliance firm Bitrace found that $649 billion worth of stablecoins flowed through addresses classified as high-risk in 2025, according to an April 29 report. Bitrace defines high-risk blockchain addresses as those used by illegal entities to receive, transfer or store stablecoins.Enhanced compliance measures, blockchain analytics, collaboration with law enforcement, regulatory clarity, and user education are all essential components of a comprehensive strategy.As stablecoins continue to evolve and play an increasingly important role in the global financial system, vigilance and proactive action are paramount to ensuring their responsible and secure use. Per the report, the amount accounted for roughly 5.14% of all stablecoin transaction volume in 2025. This is down 0.8% from 5.94% the previous year, but significantly higher than the 2.8% reported in 2025 and 1.63% in 2025. Proportion of high-risk stablecoin transactions. Source: Bitrace. Related:The future of stablecoins depends on our collective ability to mitigate the risks of illicit activity and foster a trustworthy and transparent digital asset ecosystem.By prioritizing security and compliance, we can unlock the full potential of stablecoins while protecting users and preserving the integrity of the crypto space.