Illicit Crypto Transactions Reached $158 Billion in 2025
Illicit use of digital assets spiked to $158 billion last year, marking a sharp reversal after years of decline, according to a TRM Labs report analyzing 2025 data released on January 28, 2026. The findings highlight a growing sophistication among criminal actors even as the overall market expands.
Despite the jump in absolute dollar value, illicit activity's share of the total crypto market continued to shrink, falling to 1.2% of all volume. This is contrasted with a rapidly growing legitimate ecosystem, which saw approximately $4 trillion in stablecoin activity alone in 2025. "That 1.2% is existential," noted Ari Redbord, TRM's global head of policy, citing the use of crypto by state actors like North Korea to fund weapons programs.
State-Backed Sanctions Evasion Accounts for $72 Billion
A significant driver of the illicit volume was sanctions evasion, with $72 billion in activity overwhelmingly linked to Russian entities. The report specifies that much of this activity was funneled through the ruble-backed stablecoin A7A5, with one wallet cluster known as A7 potentially connected to over $39 billion in Russian sanctions evasion.
Beyond sanctions, crypto hacks accounted for nearly $3 billion in stolen funds in 2025, a higher figure than the previous year. A single attack on the Bybit exchange in February represented about half of this total. TRM's research indicates that sophisticated state-linked groups, particularly from North Korea, are now targeting the core operational infrastructure of crypto services. These groups employ advanced laundering techniques, such as using "Chinese laundromats" to complicate tracking and recovery efforts.
Report Fuels U.S. Regulatory Debate
The report's publication comes at a critical time, as U.S. lawmakers are actively debating comprehensive crypto market structure legislation. The data showing a rise in illicit dollar amounts is expected to intensify calls for more stringent safeguards against criminal activity. The findings provide fresh ammunition for legislators demanding stronger anti-money laundering and security provisions, potentially complicating the path to a bipartisan agreement on digital asset regulation.
