Stablecoins account for most illicit crypto activity, FATF says

Share This Post

The Financial Action Task Force (FATF) said that “stablecoins are the most popular virtual asset used in illicit transactions,” including Iran and North Korea, and therefore calling for stricter oversight of stablecoin issuers in a 42-page report published Tuesday.

In January 2026, the global watchdog said it found stablecoins accounted for most illicit onchain activity. It estimated there was approximately $51 billion in illicit stablecoin activity relating to fraud and scams in 2024.

In its March 2026 report, the task force again warned dollar-pegged tokens have become a key vehicle for illicit finance. It cited a Chainalysis report that said stablecoins accounted for 84% of the $154 billion in illicit virtual asset transaction volume in 2025. The report highlighted cases involving North Korean and Iranian actors using stablecoins such as USDT for proliferation financing and cross-border payments tied to sanctioned activity.

TRM Labs released a report mid-February saying that in 2025, illicit entities received $141 billion in stablecoins, the highest level observed in five years. The report noted that overall stablecoin activity exceeded $1 trillion per month on several occasions last year. Sanctions-related activity accounted for 86% of illicit crypto flows, the report said, with bad actors mostly relying on stablecoin platforms.

The FATF said peer-to-peer transfers via unhosted wallets present a “key vulnerability” because these types of transactions can occur without anti-money laundering controls.

While stopping short of calling for blanket blacklisting, the FATF urged countries to impose anti-money laundering (AML) obligations on stablecoin issuers and consider requiring tools such as wallet freezing and banning or restricting functions embedded in smart contracts.

With stablecoins now exceeding $300 billion in market value, FATF warned regulators must act quickly to close compliance gaps as adoption accelerates.

Related Posts

ECB’s Cipollone Says Digital Euro a Matter of Sovereignty

European Central Bank Executive Board member Piero Cipollone said...

Bybit Secures First Full Dubai Spot Trading Licence

Cointelegraph is committed to providing independent, high-quality journalism across...

SEC flags tokenization as high-risk area in 2027 market examinations

The SEC’s latest priorities highlight tokenization as an emerging...

IRS Targets 120-Day Tax Disclosure Process: Forbes

The US Internal Revenue Service (IRS) is preparing to...

US Senate to Probe Tether Payments to Ex-Trump Adviser’s Company

Update (Oct. 23, 6:27 pm UTC): This article has...

Pentagon bans US forces from using military info to bet in prediction markets

Hegseth warned that prediction market wagers could expose military...