The scale and nature of crypto-related crime changed markedly in 2025. According to new analysis from Chainalysis, illicit activity on public blockchains reached record levels, driven less by retail scams and more by state-aligned actors using crypto as financial infrastructure. The shift matters for Europe because it reframes digital currencies not just as a market issue, but as a question of monetary sovereignty and security.
Chainalysis estimates that illicit crypto addresses received at least $154 billion in value in 2025, a sharp increase on the previous year. While this still represents less than one percent of total on-chain activity, the composition has changed. Nation state linked networks, sanctions evasion and professional laundering services now account for a growing share of flows.
From cybercrime to state finance
One of the clearest signals in the report’s introduction is the role of sanctioned states. North Korea linked hacking groups continued to dominate large-scale theft, while Russian and Iranian connected networks increasingly used crypto rails to move and store value beyond the reach of traditional banking controls.
In Russia’s case, Chainalysis points to the emergence of bespoke crypto instruments designed specifically to bypass sanctions. Rather than hiding within global platforms, these tools operate as parallel financial channels, tailored to national needs. This marks a departure from earlier patterns of crypto crime, which were largely opportunistic and decentralised.
The report also highlights how crypto is now intertwined with real world power projection. Illicit flows are linked not only to cybercrime, but also to weapons procurement, logistics and the financing of armed groups. Crypto, in this sense, is no longer just a payment method, but part of state level economic strategy.
Stablecoins take centre stage
Another striking finding is the dominance of stablecoins. Chainalysis says they accounted for more than four fifths of all illicit crypto transaction volume in 2025. Their appeal is straightforward: price stability, deep liquidity and easy cross-border transfer.
For European policymakers, this is a double-edged signal. On the one hand, it underlines why privately issued digital dollars have become the default medium of exchange on chain. On the other, it raises questions about reliance on foreign currency instruments in a world where financial conflict is increasingly digital.
This context helps explain why the European Central Bank has repeatedly framed the digital euro as a tool for resilience rather than innovation. A widely accepted public digital currency, governed under EU law, could reduce dependence on non-European payment instruments in both legal and illicit contexts.
Why this matters for the digital euro
The Chainalysis report does not argue for or against central bank digital currencies. But its findings sharpen the strategic case behind them. If crypto rails are here to stay, the question is not whether value will move on chain, but under whose rules.
For Europe, the risk is not that the digital euro enables crime, but that the absence of a public alternative leaves the field to foreign stablecoins and opaque private infrastructures. In a world where sanctions, enforcement and geopolitics increasingly intersect with code, payment architecture becomes a policy lever.
At the same time, the report reinforces the need for strong compliance, transaction monitoring and international cooperation. Public digital money will not eliminate illicit finance on its own. But it can give authorities greater visibility and control than fragmented private systems allow.
As lawmakers debate the digital euro’s final design, Chainalysis’s data offers a sobering backdrop. Crypto crime is no longer a fringe issue. It is evolving into a feature of global financial competition, and Europe’s response will shape how much influence it retains in the digital money era.