Crypto’s big growth on the books and in the shadows
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How is cryptocurrency being used in illegal transactions?
Crypto is increasingly becoming a tool for crime. For American Public Media, this is Marketplace Tech. I'm Stephanie Hughes.
Cryptocurrency is being used more frequently in illegal transactions. About $158 billion was used in illicit crypto activity last year, an all-time high. That's according to a new report from the startup TRM Labs. This comes as the overall crypto ecosystem is growing. And it should be said legitimate uses of crypto are growing at a faster rate than illegitimate ones. I talked about all this with Ari Redboard, one of the authors of the new report.
as the ecosystem grows, we're seeing lawful actors really, really leverage crypto infrastructure.
What does the TRM Labs report reveal about illicit crypto activity?
The growth of cryptocurrency exchanges, financial institutions getting more involved in the space. We're finally seeing the use of stable coins for payments at scale. So I think what we've done is we've seen crypto infrastructure grow, but we're also seeing illicit actors take advantage of crypto infrastructure. So for example, the largest driver of illicit activity in 2025 was a Russia-based related stable coin called A7A5. That was the largest driver of sanctions activity, but also one of the largest drivers of overall illicit activity. And that's very much infrastructure, right? That's a nation state actor. developing a stable coin, cryptocurrency, to evade sanctions at scale. We've seen, you know, activity in places like Venezuela, where the state is involved in this activity.
How is the legitimate use of cryptocurrency growing?
We've seen North Korea continue to attack cryptocurrency exchanges and steal billions of dollars of funds. So I would say we're seeing this move towards taking advantage of crypto infrastructure, which is something that's really helped drive illicit activity.
You mentioned sanctions. Sanctions-related crypto activity rose over 400% last year, making it the largest contributor to this rise. Sanctions can prohibit transactions with certain countries or individuals. They can be broad or narrow. Tell me what you think is happening here.
One of the reasons that illicit actors look to cryptocurrency is because it moves outside the US financial system. And our entire sanctions regime is predicated on the hegemony of the US dollar, essentially, right? Everyone needs to access US dollars.
What role do stablecoins play in financial transactions?
And cryptocurrency, particularly stable coins, have become a powerful tool in order to move funds outside the U.S. financial system at unprecedented speed and scale. And I really, I keep coming back to A7, A5 this year that has been used to evade sanctions because there was just so much activity there. And it really drove the sanctions activity and it drove overall illicit volumes.
Yeah. Tell me a little bit more about that. You know, in the report, there's this line that, you know, this growth points to the idea that crypto is helping build a shadow economy alongside the legitimate economy. Can you tell me a little bit more about what that means?
U.S. dollar-backed stablecoins are allowing for financial freedom in all kinds of places throughout the world.
How are nation-state actors leveraging cryptocurrency for illicit activities?
There's been a lot of discussion around Venezuela over the last few weeks or months. That is a place that has lawful users looking to stablecoins in a dollarized economy. We're seeing similar things in Argentina and really across South and Central America and the world. So on the one hand, we're seeing global adoption of stable coins. And on the other hand, we're also seeing bad actors look to them to move funds outside of the traditional financial system.
Is there any answer to that? You know, you guys think about solutions, like how do you conquer that kind of growth?
Yeah, no, it's a great question. And I think you target the illicit underbelly of the overwhelmingly lawful crypto ecosystem. The Washington Post, based on a TRM report, wrote about two Iran-based cryptocurrency exchanges that were being leveraged by the IRGC, which is Iran's elite military unit, to launder illicit proceeds, to evade sanctions. Right after that report was published, the US Treasury Department sanctioned those cryptocurrency exchanges and the financial facilitator who was using them to launder IRGC funds.
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Chapters
8 chapters
1
How is cryptocurrency being used in illegal transactions?
0:00–0:50
2
What does the TRM Labs report reveal about illicit crypto activity?
0:50–1:35
3
How is the legitimate use of cryptocurrency growing?
1:35–2:21
4
What role do stablecoins play in financial transactions?
2:21–3:06
5
How are nation-state actors leveraging cryptocurrency for illicit activities?
3:06–5:01
6
What types of scams are prevalent in the crypto space?
5:01–6:32
7
How has AI impacted the landscape of cryptocurrency scams?
6:32–9:57
8
What measures can be taken to combat cryptocurrency-related scams?
9:57–11:21