Sanctions and State Activity Push Illicit Crypto Flows to Record Levels in 2025

Rising global sanctions and increased state involvement drove illicit cryptocurrency activity to record levels in 2025. Data indicates that sanctioned entities were the primary source of these flows, even though illegal use continued to account for only a small portion of total crypto transactions. Analysts describe the shift as a response to mounting geopolitical pressure rather than a breakdown in compliance.

Sanctioned Entities Drive Record $154 Billion in On-Chain Transactions in 2025

According to a Chainalysis report released Thursday, illicit cryptocurrency addresses received at least $154 billion in 2025. That total represents a 162% increase from $59 billion in 2024 and marks the highest level recorded to date. Most of the increase stemmed from sanctioned actors seeking workarounds to traditional financial channels as restrictions expanded worldwide.

Throughout 2025, there were “unprecedented volumes associated with nation-states’ on-chain behavior.

Chainalysis

State-linked activity was particularly pronounced. Chainalysis reported “unprecedented volumes” tied to government actors, describing the period as a turning point in the illicit on-chain ecosystem. 

In February 2025, Russia—facing extensive sanctions following its invasion of Ukraine—introduced a ruble-backed token known as A7A5. Blockchain records show the token processed more than $93.3 billion in less than a year, placing it among the most active state-affiliated crypto instruments observed so far.

Sanctions continued to expand throughout the year. The Global Sanctions Inflation Index estimated nearly 80,000 sanctioned individuals and entities worldwide as of May 2025. 

Separate research from the Center for a New American Security found that the United States added 3,135 names to its Specially Designated Nationals and Blocked Persons List in 2024, the largest annual increase on record.

Nation-State Activity and Stablecoins Reshape Illicit Crypto Flows

Stablecoins featured prominently in illicit crypto activity. Usage patterns in illegal transactions closely mirrored those in legitimate markets, reflecting their price stability and ease of transfer.

Key developments shaping illicit crypto activity in 2025 included:

• Stablecoins accounting for 84% of illicit transaction volume.
• Sanctioned entities driving most year-over-year growth.
• Greater direct participation by nation-states in on-chain activity.
• Increased cross-border transfers amid narrowing banking access.
• Preference for stablecoins due to lower price volatility.

Despite the sharp rise in illicit transaction volume, illegal crypto use remained limited in scope. Chainalysis estimates that legitimate transactions accounted for more than 99% of all cryptocurrency activity, with the illicit share of attributed volume remaining below 1%.

Criminal finance continues to rely primarily on traditional money. Estimates from the United Nations Office on Drugs and Crime place global criminal proceeds at roughly 3.6% of worldwide GDP, far exceeding crypto-related figures. While illicit crypto totals are expected to rise in 2026 as additional addresses are identified, analysts note that the broader ecosystem remains overwhelmingly lawful.