Crypto Crime Skyrockets to $158B in 2025 – Yet Illicit Use Plummets, TRM Report Reveals

Crypto crime hit a staggering $158 billion last year—but here's the twist you won't see on the evening news.

The Contradiction in the Data

TRM Labs' latest analysis shows illicit activity's share of total crypto volume keeps shrinking. Criminals are moving more money, but they're getting drowned out by legitimate adoption. It's like finding a bigger puddle in a rising ocean.

Follow the Money, Not the Panic

Regulators and media love the big, scary number. They'll wave that $158 billion figure like a bloody shirt. What they skip is the context—the proportion of illegal transactions keeps falling as the overall ecosystem explodes. Traditional finance, of course, still moves more dirty cash before lunch.

The Bullish Undertow

This isn't an apologia for crime. It's a reality check. The infrastructure—exchanges, analytics, chain surveillance—is getting better at catching bad actors. Every headline-grabbing bust proves the system's transparency, not its failure. Try tracking a cash-filled briefcase with that efficiency.

The Bottom Line

The narrative is shifting. The story is no longer 'crypto for crime' but 'crime getting caught in crypto.' The $158 billion figure is a testament to scale, not scandal. As one cynical trader put it: 'Wall Street's quarterly fines for market manipulation probably cover the legal fees for half that crypto crime.' The train has left the station, and the regulators are finally learning how to read the timetable.

Although the dollar terms increased sharply, the illicit transactions formed only 1.2% of the entire on-chain volume, compared to 1.3% in 2024 and much less than the 2.4% high in 2023.

These numbers are generally in line with the estimates released this month by Chainalysis, which estimated crypto crime at $154 billion in 2025 as being less than 1% of total crypto activity.

Illicit Actors Capture Less Crypto Capital Despite Higher Volumes

To better capture risk, TRM introduced a new metric that measures illicit activity relative to deployable capital rather than raw transaction volume.

Through this method, the company discovered that the illicit players took 2.7% of the liquidity of the crypto in 2025 compared to 2.9% the year before and 6.0% the year before.

TRM said the data suggest that while certain illicit categories expanded in absolute terms, criminal actors absorbed a smaller proportion of new capital entering the ecosystem.

In 2025, activity related to sanctions had led to the illicit volume, mostly associated with Russia-related flows. TRM credited the growth to the increased use of A7A5, a ruble-pegged stablecoin that transacted a total volume of more than $72 billion throughout the year.

Russia’s ruble-backed stablecoin A7A5 has surpassed more than $100 billion in transactions in less than a year.#RussiaStablecoin #A7A5 #RussiaSanctionshttps://t.co/QUp9twlECE

At least $39 billion of transactions were correlated to wallets belonging to the Russian sanctions-evasion system A7, suggesting a high level of coordination of an activity related to state-consistent financial infrastructure, instead of extensive use of the market.

Stablecoins were the main vehicle, and the activity moved to less regulated and riskier channels as enforcement increased.

Cryptography was reconfigured by geopolitical pressures that influenced several areas, as Venezuelans have turned into major users of stablecoins and peer-to-peer transactions to pay their daily income, remittances, and informal services due to the lack of economic stability.

In Iran, crypto buying and selling activities have been resilient to sanctions, with the total volume of transactions decreasing in the June 2025 Iran-Israel war, yet values went up, indicating larger transfers, with illegal operations reaching up to $580 million.

Iran is reportedly offering ballistic missiles, drones and warships to foreign governments for cryptocurrency, seeking payment routes that bypass Western financial controls.#Iran #ArmsTrade https://t.co/kfVy8B4bgL

Scams, Hacks, and AI Fuel Crypto Crime in 2025

Another key cause of illicit volume was crypto theft, where $2.87 billion was stolen in almost 150 hacks and exploits in 2025.

Although there was a slight decrease in the number of incidents, the number of losses shot up as attackers began to target operational infrastructure instead of smart contracts.

In February, a single breach at Bybit, which was linked to the North Koreans, cost the company $1.46 billion, or over half of the entire annual losses.

In total, five cases accounted for about 70% of stolen money, underlining the impact of several big attacks on annual results.

Fraud remained persistent, with scams accounting for an estimated $35 billion in losses, similar to 2024 levels. Investment scams, including so-called pig butchering schemes and Ponzi operations, made up nearly two-thirds of that figure.

Stablecoins dominated fraud inflows, and TRM noted that criminal networks increasingly used generative AI to scale outreach and create more convincing deceptions while accelerating laundering to MOVE funds within days of receipt.

Other illicit markets also expanded, with online drug trafficking reaching more than $3.4 billion in crypto volume, driven largely by Russian-language darknet marketplaces.