Illicit Crypto Activity Falls to Historic Lows in 2025 — Marking a New Era of Clean Trading
Illicit cryptocurrency activity across centralised exchanges has dropped to its lowest levels on record in 2025, signalling a major turnaround for an industry long criticised for enabling financial crime. Fresh data from Chainalysis and TRM Labs shows a sharp decline in exposure to wallets tied to scams, hacks and sanctioned entities, reflecting strengthened compliance measures and smarter monitoring tools across the ecosystem.
Record-Low Illicit Exposure Across Major Exchanges
As of June 2025, the seven largest global crypto exchanges recorded just 0.018% to 0.023% of total trading volume linked to illicit wallet addresses, a dramatic decrease compared to figures reported two years ago. Analysts say the decline demonstrates the industry’s shift toward more robust risk management, transparency, and improved collaboration with regulators.
Binance emerged as the strongest performer among major platforms. Chainalysis reported that only 0.007% of Binance’s June 2025 trading activity was connected to illicit sources, more than 2.5 times lower than the industry average. TRM Labs reached a similar conclusion, placing Binance’s “direct exposure” at 0.016% compared to the roughly 0.023% recorded for competing exchanges.
Binance’s Scale Makes the Decline Even More Significant
Because Binance processes trading volume equal to that of its six closest competitors combined, maintaining such low exposure ratios is especially notable. “Direct exposure” refers to the percentage of an exchange’s total activity that interacts with wallets confirmed to be associated with criminal operations, sanctions evasion, hacks or fraud.
A lower figure indicates that suspicious transactions are being identified, blocked or reported early, preventing them from circulating across the wider ecosystem.
Between January 2023 and June 2025, Binance cut its illicit exposure by 96–98%, even as daily trading soared to 217 million trades and more than $90 billion in volume.
Compliance, Technology and Coordination Drive Industry-Wide Progress
The dramatic drop is not limited to Binance. Across the industry, exchanges have adopted stronger compliance frameworks, better tracking technology, and enhanced coordination with analytics firms and law-enforcement agencies.
Binance alone now employs more than 1,280 staff in compliance, risk and investigations, roughly 22% of its global workforce. The exchange also uses AI-driven surveillance tools, responds to hundreds of thousands of law-enforcement requests, provides investigator training, and participates in anti-money laundering networks, including Beacon Network and T3+.
These advancements highlight how structured compliance programmes and collaboration can fundamentally reduce criminal abuse of crypto services.
Putting the Data in Context: Crypto vs Traditional Finance
The findings also challenge long-standing claims that crypto is a primary channel for financial crime. Studies cited by NASDAQ, the United Nations and the IMF estimate that trillions of dollars in illicit funds move annually through traditional banking systems via anonymous fiat transfers, shell companies and offshore accounts.
By comparison, illicit crypto activity is now a tiny fraction of global trading volume, especially as exchanges adopt stricter checks and transparent reporting.
A New Narrative for Crypto Markets
The sharp decline in illicit exposure suggests the narrative surrounding crypto as a haven for criminal finance is becoming outdated. Major exchanges are transforming into highly monitored, regulated environments, offering users safer and more transparent marketplaces.
Looking Ahead: Sustaining the Gains
To maintain progress, the industry must continue investing in compliance technology, strengthen collaboration with regulators, and maintain high levels of transparency. The 2025 data makes one thing clear: with the right tools and diligence, the crypto sector can scale rapidly without compromising integrity.
