FATF warning on stablecoin crimes is not anti-crypto, intel firms say

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A latest warning from the Financial Action Task Force (FATF) concerning the rise of stablecoin-related crimes does not pose a menace to the cryptocurrency business, in keeping with executives at blockchain intelligence firms.

The FATF’s name to handle rising illicit stablecoin exercise displays a necessity for shut monitoring and evaluation somewhat than an effort to curb their progress, in keeping with executives at Chainalysis and Asset Reality.

The international monetary crime watchdog sounded the alarm on stablecoins Thursday, asking regulators to focus on mitigating the dangers of their potential mass adoption.

“That’s not anti-crypto. It’s a recognition that credibility and growth depend on regulation that actually works,” Asset Reality co-founder Aidan Larkin informed Cointelegraph.

Stablecoins make up 63% of illicit crypto transfers

“Stablecoins are the dominant form of crypto asset for transacting value as well as for undertaking illicit activity,” Chainalysis coverage adviser Jordan Wain stated. He cited knowledge from the “2025 Crypto Crime Report” by Chainalysis, which revealed that 63% of all onchain illicit transaction volumes have been denominated in stablecoins.

According to Wain, the FATF’s alarm on stablecoins goals to advertise “more uniform licensing and supervision of stablecoin issuers” throughout nations, deployment of real-time monitoring and nearer worldwide collaboration to trace, establish and disrupt illicit flows.

Onchain crimes by belongings: stablecoins, altcoins, Ether and Bitcoin. Source: Chainalysis’ 2025 Crypto Crime Report 

“[The] FATF isn’t calling for a ban on stablecoins. It is calling for visibility and better enforcement,” Asset Reality’s Larkin stated, including that this suits with the broader technique introduced in 2023 for elevated focus on asset restoration.

“That means applying the same AML [Anti-Money Laundering] standards used in traditional finance to the digital world,” Larkin added.

Tracking crimes is solely a part of the equation

Larkin stated that making use of superior blockchain intelligence instruments is not sufficient to mitigate dangers behind a mass adoption of stablecoins.

“Monitoring onchain behavior is only part of the equation,” he stated, including:

“Enforcement in the form of secondary sanctions has been debated by politicians in multiple jurisdictions to place more onus and responsibility on those crypto entities that knowingly facilitate sanctions evasion and use secondary sanctions to pressure compliance […]”

Chainalysis’s Wain additionally highlighted stablecoins’ inherent transparency and traceability, which might make them a “poor choice” for legal exercise. He careworn that centralized stablecoin issuers additionally retain the power to freeze funds after they grow to be conscious of their illicit use.

Related: Tether blocks $12.3M in USDT tied to suspicious Tron addresses

“We have seen this capability used to great effect,” Wain stated, referring to Tether freezing and seizing $225 million in its USDt (USDT) stablecoin related to rip-off exercise on the request of the US authorities in 2023.

ZachXBT flags thousands and thousands in Circle’s USDC tied to DPRK

Following the FATF’s name for nearer scrutiny of stablecoin use by the Democratic People’s Republic of Korea (DPRK), some blockchain investigators have been unpacking onchain knowledge looking for insights.

Crypto sleuth ZachXBT took to X on Tuesday to assert that public stablecoin issuer Circle and its USDC (USDC) stablecoin are the “primary infra used by DPRK IT workers to facilitate payments.”

“I can point out high eight figs [figures] in recent volume,” he stated, including that Circle “currently does nothing to detect or freeze the activity while boasting about compliance.”

Source: ZachXBT

Cointelegraph approached Circle for remark relating to the submit by ZachXBT however had not acquired a response on the time of publication.

Circle froze $57 million in USDC on Solana tied to the Libra staff on the request of a US federal courtroom in May.

Related: North Korea crypto hackers faucet ChatGPT, Malaysia highway cash siphoned: Asia Express

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