Stablecoins account for most illicit crypto activity, FATF says

CoinDesk

by Olivier Acuna

March 3, 2026

AI-Generated Deep Dive Summary

The Financial Action Task Force (FATF), a global watchdog on financial regulations, has highlighted that stablecoins are increasingly being used in illicit activities such as sanctions evasion and money laundering. In its latest report, FATF revealed that stablecoins accounted for 84% of the $154 billion in illicit crypto transactions in 2025. This marked a significant rise from previous years, with fraud and scams involving stablecoins reaching approximately $51 billion in 2024. The report emphasized that these activities are often linked to entities in North Korea and Iran, which use stablecoins like USDT for proliferation financing and cross-border payments tied to sanctioned regions. The FATF’s findings underscore the growing risks posed by unhosted wallets and peer-to-peer transfers, as these transactions bypass traditional anti-money laundering (AML) controls. While not advocating for a complete ban on stablecoins, the task force called for stricter AML obligations on issuers and urged countries to consider regulating tools such as wallet freezing and smart contract functions. These measures aim to address the vulnerabilities in the current system that allow illicit actors to exploit stablecoin platforms. Stablecoins have become a favorite tool for bad actors due to their perceived stability and ease of use, with sanctions-related activity accounting for 86

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Originally published on CoinDesk on 3/3/2026