The Monetary Motion Activity Power (FATF) stated that “stablecoins are the preferred digital asset utilized in illicit transactions,” together with Iran and North Korea, and due to this fact calling for stricter oversight of stablecoin issuers in a 42-page report printed Tuesday.
In January 2026, the worldwide watchdog stated it discovered stablecoins accounted for many illicit onchain exercise. It estimated there was roughly $51 billion in illicit stablecoin exercise referring to fraud and scams in 2024.
In its March 2026 report, the duty pressure once more warned dollar-pegged tokens have grow to be a key automobile for illicit finance. It cited a Chainalysis report that stated stablecoins accounted for 84% of the $154 billion in illicit digital asset transaction quantity in 2025. The report highlighted instances involving North Korean and Iranian actors utilizing stablecoins similar to USDT for proliferation financing and cross-border funds tied to sanctioned exercise.
TRM Labs launched a report mid-February saying that in 2025, illicit entities obtained $141 billion in stablecoins, the best degree noticed in 5 years. The report famous that total stablecoin exercise exceeded $1 trillion monthly on a number of events final yr. Sanctions-related exercise accounted for 86% of illicit crypto flows, the report stated, with unhealthy actors largely counting on stablecoin platforms.
The FATF stated peer-to-peer transfers by way of unhosted wallets current a “key vulnerability” as a result of these kind of transactions can happen with out anti-money laundering controls.
Whereas stopping wanting calling for blanket blacklisting, the FATF urged international locations to impose anti-money laundering (AML) obligations on stablecoin issuers and contemplate requiring instruments similar to pockets freezing and banning or limiting features embedded in sensible contracts.
With stablecoins now exceeding $300 billion in market worth, FATF warned regulators should act rapidly to shut compliance gaps as adoption accelerates.
