"$649 Billion Illicit Activity: 2024 Stablecoin Report"

Stablecoin Transfers Linked to Illicit Activity

In 2024, a staggering $649 billion worth of stablecoins were found to have flowed through addresses classified as high-risk, according to a recent report by cryptocurrency compliance firm Bitrace. High-risk blockchain addresses are those that are associated with illegal entities using stablecoins for receiving, transferring, or storing funds.

Crypto compliance firms use various criteria to assess the risk level of crypto wallet addresses, with higher risk indicating a higher likelihood of involvement in illicit activities. These high-risk addresses are less likely to be accepted by compliant crypto businesses.

The $649 billion in high-risk stablecoin transactions accounted for approximately 5.14% of all stablecoin transaction volume in 2024. While this percentage was down slightly from the previous year, it remained significantly higher than the levels seen in 2022 and 2021.

Tron USDT Dominates High-Risk Transactions

According to Bitrace's data, Tron-based USDT emerged as the leader in high-risk stablecoin transactions, with over 70% of the volume moving on the network. Ethereum-based USDT and a small portion of USDC transactions made up the remaining high-risk stablecoin activity.

The dominance of USDT can be partly attributed to its larger market capitalization and wider adoption compared to other stablecoins. At present, USDt boasts a market cap of over $148 billion, while USDC's market cap exceeds $62 billion.

Surprisingly, Tron's prevalence in high-risk transactions is less straightforward to explain. Despite Ethereum being the more popular choice for stablecoin users, Tron has managed to capture a significant share of the market. With nearly $71 billion worth of stablecoins circulating on Tron, it ranks second after Ethereum.

When considering USDT balances specifically, Tron holds a slightly higher share than Ethereum, with 47.4% of the USDT supply residing on the Tron network compared to Ethereum's 45.44%.

Crypto Gambling on the Rise

Bitrace's report also highlighted the significant increase in stablecoin transactions on online gambling platforms in 2024, totalling $217.8 billion, marking a 17.5% rise from the previous year. Once again, USDT dominated this sector, but USDC's market share showed a notable increase, reaching 13.36% in 2024.

These findings align with recent reports that indicated crypto casinos generated over $81 billion in revenue in 2024. Despite facing regulatory challenges in some jurisdictions, crypto gambling platforms continued to thrive.

Overall, the use of stablecoins in illicit activities remains a concern within the crypto industry. While efforts are being made to enhance compliance and combat financial crimes, the evolving landscape of digital assets presents ongoing challenges for regulators and businesses alike.