Over 5% of All Stablecoin Operations Connected to High-Risk Activities
According to a new report by analytics company Bitrace, cryptocurrency transfers to high-risk addresses reached a record $649 billion in 2024, representing 5.14% of all stablecoin operations. This is an alarming signal about the scale of illegal activity in the cryptocurrency space, despite strengthened regulatory measures. At the same time, experts note positive trends: increased transaction transparency and improved effectiveness of joint actions by stablecoin issuers and regulators in combating illegal activities.
Scale of the Problem: Trillions in the Gray Zone
The figure of $649 billion represents an unprecedented volume of funds flowing through suspicious channels. It’s important to understand that this only covers transactions that have been identified as high-risk. The actual scale of illegal activity could be even larger.
“If more than 5% of all stablecoin operations are connected to high-risk addresses, that’s a significant indicator, considering that the total stablecoin market exceeds $12 trillion,” notes Alexander Petrov, a cryptocurrency analyst at the investment company “Digital Assets.” “It’s noteworthy that most of these transactions occur on the TRON network, which is known for its low transaction costs and relative anonymity.”
According to the report, the largest share of such operations involves Tether’s USDT stablecoin on the TRON network. However, analysts note a substantial increase in the share of USDT and USDC on the Ethereum network, which may indicate diversification of channels for illegal operations.
Most identified transactions are conducted through chains of intermediate addresses, complicating the tracking of fund origins. Bitrace analysts report that on average, there may be 7-12 intermediate wallets between the initial source and the final high-risk address.
The Crypto Crime Landscape: From Gambling to Complex Fraud Schemes
The Bitrace report provides a detailed breakdown of high-risk transactions by category, allowing for a better understanding of the structure of cryptocurrency crime.
Online Gambling Leads
Online gambling takes the leading position: the volume of related transactions reached $217.8 billion, which is 17.5% higher than in 2023. Particularly noticeable is the growth of USDC’s share in gambling activities—up to 13.36% compared to 5.22% a year earlier.
“The increased use of USDC in online gambling is indicative,” comments Elena Sokolova, Director of Regulatory Affairs at Blockchain Compliance Solutions consulting firm. “Traditionally, USDC was considered a more regulated and ‘clean’ stablecoin compared to USDT, but this statistic shows the blurring of these distinctions.”
It’s important to note that not all gambling-related operations are illegal on a global scale—the status of online gambling varies depending on jurisdiction. However, the use of cryptocurrencies often allows circumvention of regional restrictions and complicates control over this sphere.
Record Growth in Fraud
The most alarming trend identified by Bitrace analysts is the sharp increase in fraud: suspicious addresses received $52.5 billion in stablecoins—more than in all previous years combined.
“We’re observing an evolution of fraudulent schemes,” explains Mikhail Voronin, a leading researcher in crypto security. “Criminals are transitioning from primitive scams and phishing to complex ‘investment’ schemes, fake trading platforms, and social engineering attacks. Schemes using artificial intelligence to create convincing phishing messages were particularly active in 2024.”
Among the most common types of fraud in 2024 are:
- Fake investment platforms offering incredibly high returns
- “Arbitrage strategies” with guaranteed profits
- Fraudulent ICOs and token presales
- Advanced wallet farming and draining schemes
- Manipulations with decentralized finance (DeFi)
Money Laundering: A Slight Decrease
Wallets associated with money laundering received $86.3 billion in stablecoins, slightly less than in 2023. Bitrace experts attribute this decrease to stricter countermeasures and more rigorous checks on major centralized exchanges.
“We’re seeing increasing effectiveness in cooperation between regulators, exchanges, and blockchain analysts,” notes Dmitry Karpov, Executive Director of the Center for Cryptoeconomics and Financial Technologies. “Criminal structures are finding it increasingly difficult to withdraw significant amounts through regulated platforms without detection.”
Countermeasures: Fund Freezing and Regulatory Actions
In 2024, major stablecoin issuers intensified their fight against illegal operations. According to the report, Tether and Circle collectively froze more than $1.3 billion on suspicious addresses, twice the amount for the previous three years combined. The total volume of all transactions on such addresses reached $12.9 billion.
“The fund freezing mechanism, often criticized for centralization, demonstrates its advantages in this case,” says Anna Komissarova, financial security expert. “However, it’s important to maintain a balance between security and the fundamental principles of the cryptocurrency space.”
The report pays special attention to the impact of regulatory measures in various jurisdictions. In particular, it notes that the tightening of rules in Hong Kong after Q3 2023 led to a significant reduction in the flow of funds to suspicious addresses connected with that region.
“The Hong Kong example shows that competent regulation can significantly reduce the scale of criminal activity without damaging the legal sector,” emphasizes Sergey Klimov, partner at the law firm “Blockchain and Law.” “We expect similar approaches to spread to other jurisdictions.”
The Big Picture: Progress Amid Growing Scale
Despite the alarming statistics, Bitrace analysts in their report emphasize that the cryptocurrency market is reaching a new level of transparency, and the actions of regulators and industry participants are already changing the situation for the better.
“Paradoxically, the growth in detected suspicious transactions partially indicates improved detection methods,” explains Viktor Savelyev, head of research at Bitrace. “Just a few years ago, a significant portion of such operations simply didn’t appear on analysts’ radar.”
At the same time, the total damage from 265 crypto hacks throughout 2024 and the first two months of 2025 exceeded $3.83 billion, according to Global Ledger data. This indicates that the security problem in the cryptocurrency sphere remains acute.
Forecasts and Recommendations
According to experts, in the coming years we should expect:
- Strengthened cooperation between law enforcement agencies of different countries, regulators, and private companies engaged in blockchain analytics
- Technological improvement of tracking tools for suspicious transactions, including the application of artificial intelligence
- Harmonization of regulatory approaches across different jurisdictions, making it more difficult to use “regulatory arbitrage” for criminal operations
- Increased user awareness about risks and security measures when working with cryptocurrencies
“The cryptocurrency industry is at a turning point in its maturation,” concludes Alexander Ivanov, a renowned crypto expert and author of “The Future of Digital Finance.” “Increasing transparency and effectiveness of anti-crime measures are necessary conditions for the mass adoption of cryptocurrencies and their integration into the global financial system.”
For ordinary users, experts recommend increased vigilance when working with cryptocurrencies: using verified platforms, two-factor authentication, cold wallets for storing significant amounts, and critically evaluating any investment offers, especially those promising unusually high returns.