Illicit cryptocurrency transactions reached an all-time high of $158 billion in 2025, according to TRM Labs‘ newly released 2026 Crypto Crime Report. This figure marks a 145% increase from the $64.5 billion recorded in 2024, shattering the multi-year decline observed from 2021 ($85.9 billion) through 2023 ($73.3 billion).
The report, which leverages advanced blockchain analytics, highlights how cryptocurrency‘s growing integration into global finance has amplified both legitimate and illicit activities.
Despite the absolute surge, the proportion of illicit flows relative to overall crypto volume actually dipped slightly, from 1.3% in 2024 to 1.2% in 2025.
When measured against incoming flows to virtual asset service providers (VASPs), it fell from 2.9% to 2.7%.
TRM attributes this nuanced picture to methodological refinements, including the exclusion of non-economic flows and enhanced attribution techniques via tools like the Beacon Network.
These updates provide a more accurate, albeit conservative, baseline, with expectations of upward revisions as new intelligence emerges.
The primary drivers behind this uptick include intensified sanctions enforcement, the rising involvement of nation-state actors, and a handful of high-profile hacks.
Sanctions-related inflows exploded by over 400% year-over-year, fueled by designations of entities linked to geopolitical tensions.
Blocklisted activities grew by 32%, while hacked or stolen funds increased by 31%.
More modest rises were seen in darknet markets (20%) and illicit goods and services (12%).
This concentration in enforcement-driven categories underscores how regulatory actions and technological advancements are uncovering previously hidden flows rather than necessarily indicating a proportional rise in new crimes.
Geopolitically, Russia emerged as a dominant player, with $72 billion in volume tied to the ruble-pegged stablecoin A7A5 and $38 billion associated with the A7 wallet cluster.
These networks facilitate sanctions evasion, connecting to infrastructures in China, Southeast Asia, and Iran. Iran and Venezuela have similarly leveraged crypto for payments and financial services amid restrictions.
A notable trend involves Chinese-language escrow and money laundering services, which processed over $103 billion in 2025—up dramatically from $123 million in 2020.
Stablecoins like USDT and A7A5 dominate these inflows, enabling seamless integration with over-the-counter (OTC) brokers, casinos, and decentralized exchanges (DEXs) without know-your-customer (KYC) requirements.
The report paints a picture of cryptocurrency evolving into a mature economic tool, where accessibility and liquidity enable larger-scale illicit operations.
However, the illicit share remains small compared to the trillions in total crypto volume, suggesting that while absolute risks are growing, the ecosystem’s overall integrity is improving through better monitoring.
TRM Labs calls for accelerated development of attribution tools, enhanced cross-jurisdictional collaboration, and a shift in focus from transaction volume to liquidity risks.
Intelligence-led strategies are essential to tackle stablecoins, non-custodial platforms, and large-scale infrastructures.
As crypto continues to bridge traditional and digital finance, stakeholders must prioritize proactive measures to curb abuse while fostering more responsible innovation.