Crypto Crime Drops 24% as Stablecoins Prove Legal in 2024

TRM Labs, a blockchain intelligence firm, has released its 2025 crypto crime report, revealing a significant reduction in crypto-related criminal activities by 24% since 2023. The report highlights that 99% of all stablecoin activity in 2024 was legal and compliant with regulations. This finding is particularly noteworthy given that stablecoins accounted for over 60% of all crypto transaction volume in 2024. The report suggests that the fears surrounding the criminal utility of cryptocurrencies may be overstated, as the high transaction volume of stablecoins is predominantly legal.

Stablecoins operate on public blockchains, which allow for precise tracking of transactions through blockchain analytics. This traceability makes stablecoins more transparent than physical cash and, in some ways, more controllable. Issuers of centralized fiat-pegged tokens, such as USDT (Tether) or USDC (Circle), have the ability to freeze or even burn tokens linked to illicit activity. This capability has made stablecoins a preferred tool for regulatory compliance in the crypto space.

Despite the legal nature of most stablecoin activity, stablecoins still accounted for 60% of the crypto-based illicit transaction volume in 2024. This illicit activity was concentrated in areas such as terrorist financing, fraud, and ransomware payments. For instance, a subsidiary of ISIS, known as Islamic State Khurasan Province (ISKP), has been reported to carry out its activities with financing from crypto platforms. Additionally, there were 5,635 publicly reported ransomware attacks, including a record $75M ransom payment made to the Dark Angels Ransomware group in March 2024.

TRM Labs attributes the reduction in illicit activities to enhanced law enforcement efforts, increased industry cooperation, and the growing adoption of analytics tools. The firm itself is contributing to this reduction through its involvement in the T3 Financial Crime Unit (T3 FCU), a multi-stakeholder partnership that includes the stablecoin issuer Tether and TRON, the blockchain most commonly used for USDT transactions.

In parallel, a wide-ranging piece of legislation aimed at establishing a comprehensive regulatory framework for stablecoins in the United States, known as the GENIUS Act, is moving through the Senate. This bipartisan-supported bill, if enacted, would introduce a licensing regime for issuers, reserve requirements to ensure that stablecoins are fully backed, mandatory audits to maintain transparency, consumer protection laws, and anti-money laundering (AML) obligations. TRM Labs believes that such regulatory clarity could accelerate stablecoin adoption among large banks, financial institutions, and corporations, simplifying cross-border trade and reducing reliance on slower, more expensive systems.

The GENIUS Act is viewed as a sister bill to the STABLE Act, another legislative initiative focused on bringing stablecoins under federal banking laws. Together, these bills could usher in an era where blockchain technology and traditional financial systems coexist under a common regulatory umbrella, promoting innovation while addressing accountability gaps in the space.