- Only 0.4% of 2024 crypto transactions were illicit, down 51% from 2023 despite rising market volume.
- Fraudsters now use AI for phishing, deepfakes, and identity fraud, with expansion expected in 2025.
- DeFi hacks rose 17%, while sanctions on Garantex and Nobitex cut flows to restricted areas by 33%.
Illicit crypto transactions in the cryptocurrency space accounted for only 0.4% of total transaction volume in 2024, according to TRM Labs . This figure reflects a significant 51% drop from the previous year, even as the market grew sharply. The total volume of crypto transactions surged by 56%, reaching over $10.6 trillion, while illegal flows fell to around $45 billion, down from $59 billion in 2023. The report outlines key shifts in criminal behavior, enforcement efforts, and the growing role of artificial intelligence in digital financial crime.
Sanction Evasion and Scams Still Dominate
TRM Labs found that more than 85% of illicit volume came from sanctioned actors, scam operations, and addresses flagged on blocklists. Blockchain networks such as Tron , Ethereum, and Bitcoin remained the top platforms for such activities.
Tron alone accounted for 58% of the total illicit flows. However, its criminal transaction volume dropped by nearly half compared to 2023. The T3 Financial Crime Unit has contributed to this outcome. TRM credited the unit, a public-private effort targeting Tether (USDT) abuse on Tron, for freezing over $130 million.
About 20% of the flagged USDT on Tron has already been returned to victims or authorities. Sanctions on Russian and Iranian exchanges such as Garantex and Nobitex, which recently suffered a $49 million breach, have impacted crypto flows. The report confirmed that these sanctions reduced inflows to restricted regions by 33% during the year.
Stablecoins and DeFi Under Criminal Focus
Despite the overall decline in illicit activity, some risks increased. TRM Labs stated that terrorist groups, including ISIS-Khorasan, continue using stablecoins for financing. These groups are also experimenting with privacy coins such as Monero (XMR) for added concealment. Hacking incidents climbed by 17% in 2024, with losses reaching $2.2 billion. DeFi protocols were the main targets. Nearly $800 million of the total was attributed to North Korean-linked groups using private key theft.
The attackers used decentralized bridges to launder stolen assets, complicating recovery efforts for investigators. Criminal groups are increasingly leveraging artificial intelligence to scale their operations. TRM Labs reported that fraudsters are deploying large language models to generate fake identities, phishing content, and deepfake extortion material.
They are also employing these tools to generate non-consensual explicit images and circumvent KYC procedures. TRM predicts a staggering increase in AI-triggered fraud activity during 2025, and that is the reason why the area makes everyone concerned within the systems of monitoring of the compliance and enforcement agencies dealing with the digital space in finance.
