In an alarming trend, the world of cryptocurrency has witnessed a significant resurgence in illicit activities, with volumes hitting record highs in 2025. A report from blockchain intelligence firm TRM Labs, released on January 29, 2026, confirms that illicit inflows into the crypto ecosystem skyrocketed by an astounding 145% year-over-year, painting a complex picture of the evolving threat landscape.
The findings indicate that illicit cryptocurrency wallets received approximately $158 billion in incoming funds in 2025, a staggering increase from $64.5 billion in 2024. This figure represents the most substantial level recorded over the past five years, signifying a dramatic rebound from previous years that saw a steady decline in illicit inflows.
Crypto Crime Volume Jumps To $158 Billion
The surge in illicit activity follows a prolonged downturn that had seen inflows diminish from $85.9 billion in 2021 to $75.4 billion in 2022 and $73.3 billion in 2023, before plummeting to an all-time low last year. Despite the sharp rise in dollar amounts, TRM Labs notes that illicit activities now constitute a smaller portion of the overall crypto market. In terms of total attributed on-chain transaction volume, illicit activity dipped slightly to 1.2% in 2025 from 1.3% the prior year, significantly down from the 2.4% peak recorded in 2023.
The report identifies sanctions-related actions as a primary driver behind the increase seen in 2025. Notably, nearly $72 billion was linked to inflows associated with the A7A5 token, alongside an additional $39 billion tied to the A7 wallet cluster. Such volumes reflect a highly concentrated pattern, with most sanctions-related activity traced back to Russia-linked entities, including notable platforms like Garantex and Grinex.
Illicit Activity Reshaped By State Actors
Geopolitical tensions have played a pivotal role in reshaping the illicit crypto landscape this past year. According to TRM Labs, state and state-aligned actors have increasingly integrated cryptocurrency into their financial frameworks rather than relying on it solely as a last-resort option. While Russian networks have been identified as the primary drivers of these sanctions-related flows, there is an emerging and significant trend: a broader institutionalization of crypto infrastructure among various sanctioned actors worldwide.
China continues to emerge as a prominent player in the illicit crypto domain, particularly as a center for illicit financial service infrastructures. TRM’s analysis reveals that networks related to Chinese-language escrow services and underground banking systems have expanded considerably. Adjusted volumes associated with these networks surged from approximately $123 million in 2020 to over $103 billion in 2025, underscoring their growing scale and impact on the crypto crime ecosystem.
As the landscape evolves, stakeholders and regulators are urged to adapt swiftly to these treacherous waters, recognizing the complex interplay of illicit activities, geopolitics, and financial infrastructure that characterize the current state of cryptocurrency crime.
