Report Reveals Stablecoins Beat Bitcoin in Dark Web Use, Signaling New Era for Illicit Crypto Flows

Stablecoins, specifically those pegged to the United States Dollar, are presently the preferred option for rogue financial dealings on the internet, meaning that Bitcoin has lost its status as the #1 cryptocurrency used in this manner.

New Chainalysis research indicates that there has been a seismic shift in the way that criminals are transferring funds digitally. According to Chainalysis, stablecoins accounted for most of the illicit transactions made last year; thus, a change in the risk profiles of digital assets has occurred.

This shift is part of a larger, surprising trend that has seen the dark web’s overall share of crypto crime plummet, as detailed in a separate report on the crumbling grip of illicit online trade.

Bitcoin’s Criminal Empire Crumbles

For more than a decade, Bitcoin (BTC) remained the unshakable “king” of digital crime. That reign is officially over. Even as occasional movements from ancient wallets—like the recent sudden shift of $3.1 million in Bitcoin linked to the Silk Road remind us of its notorious past, recent analysis shows Bitcoin’s share of criminal transactions has collapsed steadily since 2020. Stablecoins have surged to capture the vast majority of the illicit market.

This migration wasn’t random. Criminals are simply following the same trends as legitimate users. Stablecoins offer practical advantages that Bitcoin can’t match. They move with ease across borders, uphold stable worth, and work well with decentralized finance (DeFi) services.

These are also why they fuel sophisticated criminal activities with ease. By using assets tied to the US dollar, criminals essentially created a shadow banking system. It moves at internet speed and operates beyond the immediate reach of regulators. Cartels and state actors can now settle payments in a stable currency without worrying about wild price swings.

When Governments Play The Bad Guys

Unprecedented events took place in 2025. Nation-states switched from passive observers to active players within the dirty crypto economy. This represents what analysts call “Wave 3” of cryptocurrency crime.

Russia led the charge with its state-backed digital currency. After passing legislation to facilitate sanctions evasion, the country launched its ruble-backed token in February 2025. In less than twelve months, this token processed over $93 billion in transactions. Russian entities could bypass the global banking system entirely, moving value across borders without touching SWIFT or Western banks.

Iran’s networks also expanded their blockchain operations significantly. Verified wallets tied to Iranian-aligned groups confirmed their money laundering activities, illicit oil sales, and arms purchases, recording over $2 billion in total. Iranian-backed organizations now utilize virtual money at unimaginable scales.

North Korea took massive hits in the negative direction last year. Hackers associated with the regime hijacked $2,000,000,000 throughout 2025. The attack on Bybit in February resulted in losses accumulating to $1.5 billion, ranking the largest online heist in the history of cryptocurrency.

The Laundering-as-a-Service Economy

Chinese money laundering networks emerged as the backbone of this criminal infrastructure. These operations evolved into full-service criminal enterprises offering specialized capabilities to a diverse client base. They serve everyone from scam operators to state-backed hackers as well as terrorist financiers.

These networks provide what’s called a “full stack” of services. They offer domain registration, bulletproof hosting, and technical services specifically designed to resist takedowns and sanctions enforcement. This resilient infrastructure allows both financially motivated criminals and state actors to maintain operations even as law enforcement attempts to shut them down.

The criminal use of cryptocurrency is also bleeding into the physical world. Human trafficking operations highly depend on virtual currencies for depositing profits beyond border bounds. What is even more perturbing are the growing records of violent coercion attacks, where criminals physically force victims to transfer assets.

Irrespective of these scary events, illicit activity fueled by virtual cash still represents less than 1% of the legitimate crypto economy. However, that small percentage now includes nation-states weaponizing financial technology for geopolitical purposes.

The challenge ahead isn’t just about stopping criminals anymore. It’s about disrupting a professionalized, state-supported shadow economy, successfully compromising modern finance’s efficiency. The integrity of cryptocurrency now intersects directly with global security.