The Monetary Motion Activity Drive (FATF) stated that “stablecoins are the most well-liked 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 revealed 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 regarding fraud and scams in 2024.
In its March 2026 report, the duty drive once more warned dollar-pegged tokens have grow to be a key car 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 comparable 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 acquired $141 billion in stablecoins, the best degree noticed in 5 years. The report famous that general stablecoin exercise exceeded $1 trillion per 30 days 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 through unhosted wallets current a “key vulnerability” as a result of a lot of these transactions can happen with out anti-money laundering controls.
Whereas stopping in need of calling for blanket blacklisting, the FATF urged international locations to impose anti-money laundering (AML) obligations on stablecoin issuers and think about requiring instruments comparable to pockets freezing and banning or limiting features embedded in good contracts.
With stablecoins now exceeding $300 billion in market worth, FATF warned regulators should act rapidly to shut compliance gaps as adoption accelerates.