The U.S. Treasury has released a congressional report focusing on illicit activity in digital assets. It identifies stablecoins as involved in roughly 84% of illicit crypto transactions in 2025 and proposes stricter oversight. The report also highlights North Korean cyber thefts and the broader risks of scams and sanctions evasion in the cryptocurrency sector.
A U.S. Treasury report mandated by the GENIUS Act has detailed efforts to combat illicit financial activity involving digital assets. The Treasury reviewed industry feedback and examined technologies such as AI, blockchain analytics, and digital identity tools during its study. It identified risks linked to the misuse of mixers, distributed ledgers, and decentralized finance platforms.
The report calls for stronger monitoring of the crypto ecosystem, particularly stablecoins. Treasury data shows stablecoins accounted for about 84% of illicit crypto transaction volume in 2025, making them a key regulatory focus. To address this risk, the Treasury proposes AI-powered monitoring tools and real-time blockchain analytics.
Under this framework, major stablecoin issuers could be treated more like regulated financial institutions with stricter compliance requirements. Galaxy Research Head Alex Thorn remarked on the situation, stating “With stablecoins linked to a large share of illicit transactions, regulators are prioritizing stricter oversight of issuers and transaction flows.” The findings are tied to the proposed CLARITY Act, which aims to create clearer regulatory rules for digital assets.
Beyond regulation, the report highlighted the growing scale of cybercrime and state-backed activity. North Korean groups stole $1.5 billion in crypto in early 2025, bringing their estimated total to $2.8 billion over two years. These funds are reportedly used to fund weapons programs, while online scams like “pig butchering” also present expanding threats.
A separate 2026 Chainalysis report highlighted how sanctioned entities moved around $104 billion through cryptocurrency in 2025. This represents a massive 694% increase from the previous year. Together, these findings deepen the Treasury’s concerns and may push lawmakers toward advancing legislation.
