According to Bitrace's 2024 Cryptocurrency Crime Report, criminals moved $649 billion in stablecoins to high-risk addresses. While the fraudulent and money laundering use of stablecoins increased, the legitimate sector grew even faster.
The report also tracked other factors such as gambling and darknet markets. It highlighted that enforcement actions against stablecoin money laundering are increasing, with Tether and Circle freezing over $1 billion in assets last year.
Stablecoins, Cryptocurrency Crime... A Concerning Trend?
Stablecoins are a crucial component of the international cryptocurrency ecosystem, but they play a similar role in crime. For example, crypto detective ZachXBT claimed last month that North Korean hackers are participating in this area at an "epidemic level".
Bitrace's 2024 crime report details illegal activities across the industry, with a particular focus on stablecoins.
According to the data, $649 billion in stablecoins were moved to high-risk addresses last year, a definite increase from 2023. However, these transactions represent only 5.14% of global stablecoin transaction volume, down from 5.94% the previous year.
In other words, the stablecoin sector is growing faster than its use in cryptocurrency crime.
Naturally, Tether accounts for most of these transactions, as it is the most popular stablecoin. TRON and ETH are the most popular blockchains for USDT stablecoins, accounting for about 90% of crime-related transactions.
ETH's presence has increased compared to TRON, but the latter still accounts for over 75% of transactions.
๐งต Stablecoins in Crypto Crime.
โ Onchain Foundation (@OnchainHQ) December 27, 2024
1/ Since 2022, stablecoins replaced Bitcoin as the preferred currency for illicit transactions. pic.twitter.com/FxExZHQky5
While Bitrace's cryptocurrency crime report primarily focused on the stablecoin industry, it also covered several other sectors.
For example, illegal transactions on the darknet increased by over $30 billion, as sellers shifted to DeFi to avoid law enforcement. Cryptocurrency gambling has also increased, rising by 17.5% to $217.84 billion.
However, the industry is taking several initiatives. Fraud and fraudulent activities surged last year, increasing from $12 billion in 2023 to $52 billion in 2024.
Escrow services like Huiwan play a crucial intermediary role. Tether is working to freeze wallets. While Huiwan only neutralized a tiny portion of its transactions, it's a good start.
Tether and Circle are actively working to freeze cryptocurrency wallets used by criminals, as stablecoins are crucial to this ecosystem.
The total amount of frozen assets increased by nearly $1 billion in 2024, double the total of the previous three years. While this is far less than needed, we hope these efforts can be expanded.
In summary, stablecoins are a thriving component of the cryptocurrency crime world, but enforcement is becoming increasingly decisive and sophisticated.
If the industry continues to focus on preventing fraud and money laundering, it can create meaningful change. Legitimate use of stablecoins overwhelms this sector, and criminals' total market share is declining.
