According to ChainCatcher, the Financial Action Task Force (FATF), a global anti-money laundering organization, pointed out in its latest report that stablecoin peer-to-peer (P2P) transfers have become a key source of money laundering risk in the crypto ecosystem, especially when users transact directly through non-custodial wallets, as the lack of regulated intermediaries makes related activities more difficult to track and regulate.
The Financial Action Task Force (FATF) states that stablecoins have become the most frequently used virtual asset in illicit crypto transactions. According to Chainalysis data, stablecoins accounted for approximately 84% of the roughly $154 billion in illicit crypto transactions in 2025. The report recommends that jurisdictions require stablecoin issuers to have the technical capability to freeze, destroy, or blacklist assets involving suspicious addresses when necessary, and to embed compliance features such as allow-lists and deny-lists into smart contracts.
The Financial Action Task Force (FATF) points out that compared to the more volatile prices of Bitcoin and Ethereum, stablecoins such as Tether (USDT) and USD Coin (USDC) are increasingly being used by criminal networks for money laundering and fund transfers due to their price stability, high liquidity, and ease of cross-border transfers. Furthermore, the report mentions that North Korean-related hacking groups and entities linked to Iran are using stablecoins to launder proceeds from cybercrime and convert the funds into fiat currency through over-the-counter dealers or peer-to-peer platforms.
The FATF called for stronger regulation of stablecoin issuers and urged the crypto industry to adopt blockchain analytics tools and anti-money laundering measures such as the “travel rule.”
