Quick Takeaways
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In 2024, $649 billion in stablecoin transactions passed through high-risk addresses, reflecting over 5% of total stablecoin activity, despite a slight decline from 2023.
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Tether’s USDT and Circle’s USDC dominated illicit stablecoin transfers, mainly driven by a surging online gambling industry, which saw $217.8 billion in stablecoin inflows—a 17.5% year-over-year increase.
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Fraud-related inflows skyrocketed to $52.5 billion, dwarfing previous yearly totals, while money laundering dropped to $86.3 billion due to enhanced regulatory scrutiny.
- Mastercard’s new stablecoin payment system and the STABLE Act highlight the mainstream adoption of stablecoins, signaling a push for stricter regulations to govern the sector.
Bitrace Report Flags $649B in Risky Stablecoin Flows
A new report from blockchain compliance firm Bitrace reveals startling data about stablecoin transactions. In 2024, $649 billion in transactions passed through high-risk addresses. This amount represents just over 5% of all stablecoin activity for the year. Although this marks a slight decline from 2023, it remains higher than levels recorded in 2021 and 2022.
The report highlights the dominance of USDT and the rise of USDC in illicit activities. Tether’s USDT maintained its position as the leading stablecoin for risky transfers, particularly on the TRON blockchain. At the same time, Ethereum-based stablecoins also saw increased activity. The booming online gambling sector processed $217.8 billion in stablecoin inflows, marking a 17.5% jump from the prior year.
Fraud-related inflows surged to $52.5 billion, eclipsing the previous total of $2.13 billion in 2021. Notably, money laundering accounted for $86.3 billion. This figure represents a drop from 2023’s $118 billion but aligns with 2022’s $84 billion. Bitrace attributes the decline to enhanced regulatory scrutiny and enforcement.
Interestingly, USDC’s involvement in illicit flows more than doubled, jumping from 5.22% in 2023 to 13.36% in 2024. Yet, both Tether and Circle demonstrated accountability, freezing over $1.3 billion in illicit funds last year—twice what they recovered from 2021 to 2023.
Despite these challenges, stablecoins are gaining traction in mainstream finance. Recently, Mastercard announced a new “end-to-end stablecoin payment system.” This initiative enables seamless transactions across major platforms like OKX and Crypto.com. Users will soon be able to spend stablecoins like USDC at over 150 million merchants globally.
Additionally, the legislative landscape is shifting. The STABLE Act, which recently passed through the U.S. House Financial Services Committee, aims to enhance regulation for stablecoin issuers. If enacted, this law would bring clarity and oversight to an industry often shrouded in uncertainty.
As technology continues to evolve, stablecoins remain an integral part of the financial ecosystem. They not only facilitate online transactions but also highlight the intricate relationship between digital currencies and regulatory frameworks. The future of stablecoins promises to balance innovation with responsibility in the ever-changing tech landscape.
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