The 2025 crypto crime report by Chainalysis has highlighted a rise in the sophistication of criminal activities.

The firm estimated illicit crypto transactions in 2024 to be $40.9 billion, down from $46.1 billion in 2023. However, this figure is projected to exceed $51 billion as more illegal addresses are identified.

Shift to Stablecoins and Ransomware Attacks

Bitcoin, once the primary currency for bad actors, has been overtaken by stablecoins, which now account for 63% of all illicit crypto transactions.

Chainalysis highlighted that financial sanctions have led to the shift toward stablecoins, as they offer speed, liquidity, and regulatory blind spots that make laundering funds easier. Further, these assets provide near-instant transactions and eliminate concerns over price fluctuations.

Some stablecoin issuers, including Tether, have frozen hundreds of addresses linked to illegal activity. In response, some criminals have turned to privacy coins like Monero (XMR), privacy wallets, and DeFi-based laundering schemes.

Ransomware payments dropped 35% in 2024, with less than half of recorded attacks resulting in payments. Chainalysis attributes this decline to law enforcement crackdowns and a reduced willingness among victims to pay.

However, groups engaged in the activity are adapting. Following the takedown of LockBit, smaller syndicates such as RansomHub have absorbed displaced operators and remain operational. The report also highlighted that ransomware tactics are shifting toward data theft and extortion.

Meanwhile, market manipulation on decentralized exchanges (DEXs) continues to thrive. In 2024, an estimated $2.57 billion in illicit trading volume was artificially generated, with 3.59% of newly minted tokens showing rug-pull characteristics.

Crypto Theft and AI-Driven Fraud Increase

The New York-based firm revealed that crypto theft grew by 21% in 2024, reaching $2.2 billion. While DeFi platforms accounted for most stolen funds, centralized services became the primary targets in the second and third quarters. North Korean hackers were responsible for 61% of these thefts.

Fraud and scams remained widespread, with high-yield investment schemes and “pig butchering” among the most successful. Chainalysis revealed the growing use of AI tools by lawbreakers to bypass KYC measures and automate fraud. The analysis described this as part of a broader trend in cybercrime, where AI is being leveraged to enhance deception and evade detection.

Bad actors in the crypto space have also become more professional, with hackers, scammers, and extortionists behind $10.8 billion of the estimated $40.9 billion in digital asset crime last year.

Chainalysis further examined the SEC’s crackdown on $2.57 billion in market manipulation schemes, detailing evolving criminal tactics and enforcement efforts. As regulators respond to stablecoins’ growing role in money laundering, oversight is expected to tighten.

Meanwhile, AI-driven fraud is projected to expand, making deepfakes, synthetic identities, and phishing attacks increasingly difficult to detect.