$649 Billion in Stablecoin Transfers Tied to Illicit Activity in 2024, Says Report

A new report from blockchain compliance firm Bitrace has revealed that $649 billion in stablecoin transfers were linked to high-risk activity in 2024, accounting for approximately 5.14% of total stablecoin transactions throughout the year. While the percentage marks a slight decrease from 2023’s 5.94%, the sheer volume remains a cause for concern as bad actors continue to exploit blockchain’s liquidity and anonymity.

High-Risk Stablecoin Transfers Still a Major Threat

Bitrace defines high-risk addresses as wallets associated with illicit activity such as money laundering, fraud, or unlicensed gambling. These addresses are flagged based on behavioural analysis and known associations with criminal enterprises.

The latest figures show a sharp rise compared to 2022’s 2.8% and 2021’s 1.63%, indicating a longer-term trend of illicit actors embracing stablecoin transfers as a reliable tool for moving funds outside of traditional financial scrutiny.

“Stablecoins offer fast, borderless and liquid transactions — characteristics that are, unfortunately, just as appealing to criminals as they are to legitimate users,” Bitrace stated in its analysis.

Tron-Based USDT Dominates Illicit Stablecoin Transfers

One of the most striking revelations from the report is that over 70% of all high-risk stablecoin transfers took place on the Tron network — largely using Tether’s USDT. While USDT has the highest market capitalisation among stablecoins, Tron’s dominance in high-risk flows is harder to explain.

Despite Ethereum hosting a greater total stablecoin volume — roughly $124.3 billion, compared to Tron’s $71 billion — Tron still processes a larger share of USDT transactions. The report attributes this to factors such as lower transaction fees, faster confirmation times, and fewer compliance controls, which may make the network more attractive to illicit users.

Currently, 47.4% of USDT supply sits on Tron, marginally surpassing Ethereum’s 45.44%. This dynamic positions Tron at the heart of the stablecoin risk narrative.

Crypto Gambling Driving Stablecoin Usage

The report also reflects the rapid expansion of crypto-based gambling, with over $217.8 billion in stablecoin transfers flowing through online gambling platforms in 2024 — a 17.5% increase from the previous year.

While USDT continues to dominate this sector, USDC is rapidly gaining ground, making up 13.36% of all gambling-related stablecoin inflows. Despite regulatory crackdowns across several jurisdictions, crypto gambling remains a booming underground industry.

Bitrace suggests that this activity is increasingly being powered by stablecoin transfers, which offer a frictionless experience for global bettors seeking to bypass local restrictions or taxes.

“Crypto casinos generated more than $81 billion in revenue in 2024,” the report adds, “proving that stablecoins are now the financial backbone of this grey market.”

The Bigger Picture: Stablecoins at a Crossroads

As stablecoins become more deeply embedded in the global financial system, the growing use of stablecoin transfers for illicit activity poses a regulatory challenge. While their legitimate applications in remittances, DeFi, and trading are well established, the parallel growth in high-risk transactions cannot be ignored.

Bitrace’s findings may serve as a wake-up call for exchanges, wallet providers and protocols to improve KYC/AML measures and increase monitoring of stablecoin flows.

Meanwhile, Tether and the Tron network — frequently at the centre of these controversies — have announced a new financial crime unit to help tackle blockchain misuse. Whether this initiative yields meaningful change remains to be seen.

The 2024 Bitrace report paints a mixed picture: while the share of stablecoin transfers tied to crime has dipped slightly, the absolute figures remain vast. With $649 billion in stablecoin transfers linked to high-risk addresses, it’s clear that stablecoins — particularly USDT on Tron — continue to be exploited by bad actors across various sectors, including online gambling.

As the industry matures, striking a balance between privacy, innovation, and compliance will be critical to ensuring that stablecoin transfers serve more lawful purposes than illicit ones. For the latest and most accurate crypto news and expert analysis, stay glued to The Bit Gazette.