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The $51 Billion Crypto Secret: Why Stablecoins Are Now the #1 Tool for Criminals
In a newly released report, the Financial Action Task Force (FATF) says stablecoinsthose dollar-pegged crypto tokens everyone's trying to mainstreamare now the most commonly used tools for illegal activity on the blockchain. From fraud rings to North Korean hackers, illicit actors are increasingly moving money through stablecoins, especially Tether on the Tron network. The FATF highlights how stablecoins' key strengthslow cost, high speed, and price stabilityare also exactly what criminals want. And while global oversight is improving, the task force says major blind spots remainespecially around unhosted wallets that operate outside traditional financial systems.
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Meanwhile, Washington is moving in the opposite direction. The U.S. Senate just passed the Genius Act, aimed at pulling stablecoins into the regulatory fold and making them more accessible to the public. That's triggered a wave of activity. Circle (NYSE:CRCL), the issuer of USDC, went public earlier this month, and its stock has already jumped more than 6x. A company linked to Donald Trump's familyWorld Liberty Financial now pushing its own stablecoin initiative. On the surface, it looks like the U.S. is all-in. But the FATF warns that as these tokens become more embedded in daily finance, their misuse could scale just as fast.
The bigger picture? Roughly $51 billion in fraud- and scam-related on-chain transactions took place in 2024 alone, according to the report. And while stablecoins could one day sit quietly in the background of the financial system, like the Bank for International Settlements recently noted, that's far from guaranteed. Especially not with decentralized apps muddying the waters, and enforcement lagging behind innovation. FATF says it's drafting new rules for stablecoins due next year. Until then, investors eyeing the spaceespecially names like Circlemight be riding a powerful growth story... with regulators closing in fast.
This article first appeared on GuruFocus.
