On March 5, the global anti-money laundering organization Financial Action Task Force (FATF) 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 FATF points out that compared to Bitcoin and Ethereum, which have higher price volatility, stablecoins such as Tether (USDT) and USD Coin (USDC) are increasingly being used by criminal networks for money transfer and money laundering activities due to their price stability, high liquidity, and ease of cross-border transfer.
Furthermore, the report also noted that North Korean-linked hacking groups and Iranian-related entities 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 calls for stronger regulation of stablecoin issuers and for greater adoption of blockchain analytics tools and anti-money laundering measures such as the "travel rule" within the crypto industry.
