FATF Alerts 60% Stablecoin Crime Risk, Calls for Global Oversight

Stablecoins have come under increased scrutiny as concerns over their involvement in criminal activities continue to grow. The Financial Action Task Force (FATF) recently issued an alert that has sparked renewed debate on how to manage the risks associated with these digital assets without stifling innovation. Leading crypto intelligence experts suggest that the solution lies in balanced regulation rather than outright restrictions.

According to the FATF’s latest warning, the focus should be on enhancing the tracking and supervision of stablecoin activities, especially given the rising illicit usage. Data from Chainalysis indicates that stablecoins were involved in over 60% of on-chain crime in 2025, highlighting their widespread utility in both legitimate and illicit transactions. This trend emphasizes the need to bring digital assets under the same anti-money laundering standards as traditional finance.

Asset Reality co-founder Aidan Larkin described the FATF approach as “pro-structure, not anti-crypto,” stressing the importance of rules that ensure safety without hindering the adoption of digital assets. Larkin also pointed out that monitoring blockchain transactions alone is insufficient. He suggested that enforcement mechanisms, such as secondary sanctions, may be necessary to hold service providers accountable when they knowingly facilitate illicit transfers.

The misuse of stablecoins was further brought to light by crypto investigator ZachXBT, who alleged that North Korean-linked IT workers have been using USDC to funnel large sums of money. ZachXBT claims that his allegations are supported by on-chain data and criticized stablecoin issuers for not implementing stronger preventive measures. While tools like asset freezing have been effective in the past, experts argue that a consistent global framework for oversight is still lacking. The broader message is clear: stablecoins themselves are not the problem; the absence of unified, enforceable oversight is.