Stablecoins Overtake Bitcoin in 2024 Money Laundering Shift
Chainalysis data shows stablecoins accounted for 63% of crypto money laundering in 2024, surpassing Bitcoin. Criminals favor fiat-pegged tokens like USDT for rapid, low-cost cross-border transfers with minimal KYC. A common route moves illicit funds from domestic bank accounts into ETH, swaps to USDT on non-KYC exchanges or via OTC deals, then deposits to final wallets. This method suits both small fraud schemes and large-scale operations. UNODC reports Tether’s dominance in Southeast Asia, while FATF confirms growing stablecoin use in illicit finance. In South Korea, voice-phishing and second-hand market scams rely heavily on USDT, laundering sums from thousands to millions of dollars. Mixers, tumblers, randomized addresses and OTC trades further obscure money trails. Legal responses have been weak, with many offenders receiving suspended sentences. The 2024 shift highlights regulatory gaps and the need for enhanced blockchain monitoring and international cooperation. Traders should monitor policy developments and compliance measures targeting stablecoins, as tighter regulation could impact liquidity, exchange flows and market stability.
Bearish
The surge in stablecoin-based money laundering and ensuing regulatory scrutiny point to increased compliance costs and tighter oversight for issuers and exchanges. In the short term, traders may face reduced liquidity and higher transaction fees for USDT and similar tokens as platforms implement stricter KYC/AML measures. Over the long term, ongoing policy shifts could curb rapid transfers and OTC volumes, dampening stablecoin utility in arbitrage and cross-border trades. These factors collectively exert downward pressure on stablecoin markets, making the outlook bearish.