Explosive Growth in Cryptocurrency Crime: A 2025 Overview
A recent analysis by the blockchain intelligence company TRM Labs has revealed a significant rise in unlawful activities within the cryptocurrency domain in 2025. This year witnessed a remarkable escalation in the volume of illicit transactions, marking a sharp contrast to previous trends.
Surge in Crypto Crime Volume to $158 Billion
According to TRM Labs, illicit crypto wallets amassed an astonishing $158 billion in 2025, a substantial increase from $64.5 billion in 2024. This marks the most substantial figure recorded over the last five years. The resurgence follows a period of dwindling unlawful inflows, which declined from $85.9 billion in 2021 to a low of $73.3 billion in 2023. Despite this upward trend in absolute value, illicit activities represented a smaller fraction of the total crypto market.
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Percentage of Illicit Activity in the Crypto Market
As per the report, unlawful transactions comprised only 1.2% of the total on-chain transaction volume in 2025, slightly declining from 1.3% in 2024. This is a significant drop from the 2.4% peak in 2023. Illicit entities captured 2.7% of all inflows to virtual asset service providers in 2025, a decrease from 2.9% the previous year.
Key Drivers of Illicit Activity
The report identifies activities related to sanctions as a crucial factor in the 2025 increase. Inflows linked to sanctioned entities surged, with about $72 billion associated with the A7A5 token and $39 billion tied to the A7 wallet cluster. This activity is predominantly linked to Russian actors, including platforms like Garantex and Grinex.
State Actors Reshape Illicit Crypto Activity
Geopolitical shifts have significantly influenced unlawful crypto practices. TRM Labs highlights a trend where state and state-affiliated entities increasingly utilize cryptocurrency as a fundamental financial tool rather than a mere alternative. While Russian networks lead in sanctions-related transactions, the institutionalization of crypto by other sanctioned actors is a notable development.
China’s Role in the Illicit Crypto Landscape
China remains a central figure in illicit crypto operations, serving as a hub for unauthorized financial services. TRM’s findings indicate a dramatic rise in activities associated with Chinese-language escrow services and underground banking systems. These operations expanded from $123 million in 2020 to over $103 billion in 2025, demonstrating their growing influence.
Impact on the Global Crypto Market
The total cryptocurrency market capitalization is approaching the $3 trillion threshold, according to recent charts. This growth reflects both the expanding legitimate use and the persistent challenges posed by illicit activities.
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