Cryptocurrency crime will reach an all-time high in 2025, with losses to fraudulent addresses reaching at least $154 billion, a 162% increase from the previous year, according to a new report from blockchain analysis firm Chainalysis.
This dramatic increase was primarily driven by a 694% spike in financial flows to sanctioned entities, which Chainalysis says marks a new era of “large-scale state activity” in the world of crypto crime.
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From cyber criminals to nation states
The report depicts 2025 as the third wave in the evolution of crypto crime. The first wave (2009-2019) was characterized by niche rogue cybercriminals. The second wave (2020-2024) saw the professionalization of illicit organizations providing on-chain infrastructure to criminal groups. The third wave is now here. Nation states are expanding into space on a large scale to avoid international sanctions.
“Government agencies and compliance and security teams now face extremely high risks in terms of both consumer protection and national security, as nation states enter illicit cryptocurrency supply chains originally built for cybercriminals and organized crime groups,” the report said.
Russia launched the ruble-backed A7A5 stablecoin in February 2025, and in less than a year, more than $93.3 billion was traded. The move follows legislation introduced in 2024 that aims to make it easier to evade sanctions through cryptocurrencies.
North Korean hackers had their most destructive year ever, stealing $2 billion in 2025 alone. February’s Bybit exploit accounted for nearly $1.5 billion of this, making it the largest digital heist in crypto history.
Iranian proxy networks facilitated more than $2 billion in money laundering, illegal oil sales, and arms procurement through verified wallets identified with sanctions designations. Iranian-aligned organizations, including Hezbollah, Hamas, and the Houthis, are now using cryptocurrencies on an unprecedented scale.
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Stablecoins: the new currency of crime
Perhaps the most striking change revealed in the data is a dramatic shift in the assets favored by criminals.
In 2020, Bitcoin accounted for about 70% of illegal transactions, while stablecoins accounted for only 15%. By 2025, these positions will have completely reversed, with stablecoins now accounting for 84% of all illegal transaction volume, while Bitcoin has shrunk to around 7%.
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Chainalysis believes this shift is due to the practical benefits of stablecoins: ease of cross-border transfers, low volatility, and wide utility. This trend reflects legitimate cryptocurrency activity, with stablecoins accounting for an increasingly large proportion of overall trading volume.
Chinese money laundering network emerges
The report highlights the emergence of the Chinese Money Laundering Network (CMLN) as a dominant force in the illicit ecosystem. These networks now offer “laundering as a service” and other specialized criminal infrastructures, based on the framework established by businesses such as Fuione Assurance.
These full-service operations support everything from fraud and fraud to laundering North Korean hacking proceeds, sanctions evasion, and terrorist financing.
Chainalysis also warns of the growing link between on-chain activity and violent crime. While cryptocurrencies are increasingly being used in human trafficking operations, there has also been a surge in “physical coercion attacks,” in which criminals use violence to force victims to transfer assets, often coinciding with peak cryptocurrency prices.
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Situation and prospects
Despite the record numbers, illegal activity still accounts for less than 1% of all crypto trading volume, Chainalysis notes. The company also cautioned that the $154 billion figure is a “lower estimate” based on fraudulent addresses identified so far.
Historical data shows that crypto crimes do not always increase. In fact, trading volume fell during the crypto winter from $56 billion in 2022 to $50 billion in 2023. But the explosion of 2025 represents a fundamental shift in the threat landscape.
“Although the overall proportion of illegal activities remains small compared to the legitimate use of cryptocurrencies, the risks to maintaining the integrity and security of the cryptocurrency ecosystem have never been higher,” Chainalysis concluded, calling for increased cooperation between law enforcement, regulators, and cryptocurrency businesses.
