Shadow Wallets and Shady Sums: 2025’s Crypto Crime Exposé

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In the dim, smoky corridors of the digital bazaar, a report arrived-like a memo stamped with wax from the distant firm TRM Labs-announcing that the year 2025 had become a carnival of illicit commerce within the cryptocurrency realm, where the shadows grow plump as if fed by the slow bread of speculation.

Whispers from the findings say inflows from illicit entities into crypto swelled by about 145% year over year, a dramatic revival after years of pretending nothing happened in the accounting department.

Crypto Crime Volume Jumps To $158 Billion

TRM Labs estimates that illicit cryptocurrency wallets received roughly $158 billion in incoming funds in 2025, up from $64.5 billion in 2024. A figure claiming the highest level in five years, as if the ledger itself had risen in a noble suit and declared, “Behold, I am legitimate now.”

The surge followed a long lull in illicit inflows, which had steadily fallen from $85.9 billion in 2021 to $75.4 billion in 2022 and $73.3 billion in 2023, before hitting a low note last year. A tragedy for the poets of finance, yet the balance sheet never quite stops scribbling its own jokes.

Despite the sharp rise in absolute dollars, the report notes that illicit activity still accounts for a smaller slice of the overall crypto pie. The pie grows, but the appetite does not follow with equal gusto.

As a percentage of total attributed on-chain transaction volume, illicit activity declined slightly to 1.2% in 2025, down from 1.3% in 2024 and well below the 2.4% peak in 2023. Illicit entities took 2.7% of all incoming flows to virtual asset service providers in 2025, compared with 2.9% the previous year and 6.0% in 2023. A neat little arithmetic to calm the nerves of the clerks.

The report highlights sanctions-related activity as a major driver behind the 2025 increase. Volumes linked to sanctioned entities and jurisdictions rose sharply, led by roughly $72 billion in inflows connected with the A7A5 token. An additional $39 billion was tied to the A7 wallet cluster. It is as if the city discovered new chests to hide its coins, and the chests came with postmasters for company.

TRM Labs noted that this activity was highly concentrated, with the vast majority of sanctions-linked volume connected to Russia-linked actors, including platforms and entities such as Garantex, Grinex, and A7. A spectacle of shadows, staged in a theatre of numbers.

Illicit Activity Reshaped By State Actors

Geopolitical developments played a central role in reshaping illicit crypto activity during the year. TRM Labs reports that state and state-aligned actors increasingly turned to crypto as a core component of their financial infrastructure rather than merely a last-resort tool. The bureaucrats’ nightmare, but on a blockchain.

While Russia-linked networks were the primary contributors to sanctions-related flows, the report emphasized a broader and more consequential shift: the growing institutionalization of crypto rails by other sanctioned actors around the world. A grand apparatus of clocks, gears, and wary auditors.

China continues to occupy a leading position in the illicit crypto landscape, particularly as a hub for illicit financial services infrastructure. TRM’s analysis shows that activity linked to Chinese-language escrow services and underground banking networks has expanded dramatically. Adjusted crypto volumes associated with these networks grew from roughly $123 million in 2020 to more than $103 billion in 2025, reflecting their increasing scale and influence.

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2026-01-29 11:22