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Illicit entities received around $141 billion via stablecoin wallets in 2025, as stablecoin activity exceeded $1 trillion in monthly transaction volume multiple times throughout the year, according to a new report by blockchain analytics firm TRM Labs.
Published on February 17, the report provided more evidence of a booming stablecoin market, which reached a total market cap of over $300 billion in December 2025 and is predicted to achieve a $1.9 trillion valuation by the end of the decade. However, it also highlighted how this thriving space is increasingly being misused for financial crimes, such as sanctions evasion and large-scale money laundering.
In this respect, the findings were a mixed blessing for stablecoin advocates.
“Stablecoin activity has accelerated sharply over the past year, with 2025 marking a clear inflection point,” TRM Labs said. “Monthly volumes climbed steadily through early 2025 before surging in the second half of the year, repeatedly exceeding USD 1 trillion in monthly transaction value.”
TRM Labs added that this can be seen as stablecoins “reinforcing their role as core payment and settlement infrastructure rather than speculative trading instruments.”
However, this is where the good news ended, with TRM Labs going on to explain how illicit entities received a record $141 billion via stablecoin wallets in 2025.
According to the report, sanctions-related activity accounted for 86% of all illicit digital asset flows in 2025, “driven largely by sanctioned wallets, exchanges, and networked payment platforms relying heavily on stablecoins.”
Sanctions evasion has been increasingly at the forefront of many crypto-related regulatory efforts over the past couple of years, with Russia, Iran, and North Korea the major sources of concern.
For example, the United Kingdom Office of Financial Sanctions Implementation (OFSI), the country’s sanctions enforcement authority, recently formed a multiagency pilot initiative to target criminal funds linked to sanctions offences and improve how the country enforces and identifies, understands, and responds to criminal abuse of digital currencies.
Beyond its utility for sanction evasion, the TRM Labs report stated that “stablecoin usage varies sharply by illicit category, with near-total adoption in illicit goods and services and laundering networks, compared to more selective use in scams, fraud, ransomware and other opportunistic crime types.”
In terms of who is facilitating these various illicit activities, according to the report, professional facilitators and networked intermediaries, including guarantee services and front-company exchanges, where up to 99% of volume is denominated in stablecoins, represented the primary area of stablecoin-related risk.
While the report may make grim reading for legitimate stablecoin enthusiasts, it is unfortunately not an outlier, but rather the latest addition to a growing body of research highlighting stablecoin’s role in illicit finance and crime.
The sector was recently in the firing line for its links to human trafficking, with a report earlier this month from blockchain analytics firm Chainalysis finding that cryptocurrency flows to suspected human trafficking services grew 85% in 2025. The research found that “international escort” services and prostitution networks operated “almost exclusively” using stablecoins.
Despite stablecoins’ increasingly concerning criminal associations, the new report did offer some reasons for optimism about the sector and asset class more broadly.
“Overall, stablecoin usage has matured into core financial infrastructure, with sustained growth across multiple chains and clear evidence of real-world payment and settlement use,” concluded the report.
However, it again qualified this by suggesting that there’s no sign the sector’s links to illicit activities will diminish, at least not without a concerted effort from lawmakers and enforcers.
“The data suggest that stablecoins will remain central to both legitimate crypto activity and the most consequential forms of crypto-enabled crime—making them a critical focus for regulators, financial institutions, and law enforcement.”
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