FATF Warns Stablecoins Drive 60% Rise Illicit Crypto Crimes Globally

The Financial Action Task Force (FATF) has raised concerns about the increasing use of stablecoins and decentralized finance (DeFi) platforms in illicit activities, particularly highlighting their exploitation by North Korean-linked actors. Despite this, blockchain intelligence firms and industry experts emphasize that FATF's warnings are not anti-crypto but rather a call for balanced regulation to enhance trust, transparency, and sustainable growth in the sector. Data from Chainalysis reveals that stablecoins account for around 60-63% of on-chain criminal transactions, underscoring the need for consistent global oversight, real-time monitoring, and uniform licensing of stablecoin issuers across jurisdictions. Executives like Aidan Larkin of Asset Reality stress that robust enforcement mechanisms beyond just blockchain tracking, including secondary sanctions, are necessary to hold service providers accountable and ensure compliance with anti-money laundering standards. Singapore and Hong Kong are among the jurisdictions advancing regulatory frameworks, but FATF warns that outright bans are ineffective and can undermine oversight efforts. Upcoming FATF reports on stablecoins, DeFi, and offshore platforms are expected to shape the future global regulatory landscape for digital assets.