Headline: TRM Labs: 2025 was a record year for illicit crypto inflows, driven by sanctions-related activity and state-aligned actors
A new report from blockchain intelligence firm TRM Labs finds that 2025 saw a dramatic rebound in illicit funds entering the crypto ecosystem, reaching the highest level in five years. TRM estimates illicit cryptocurrency wallets received about $158 billion in incoming funds last year — a roughly 145% increase from $64.5 billion in 2024.
Key figures
- Total illicit inflows (2025): ~$158 billion (vs. $64.5 billion in 2024).
- Year-over-year increase: ~145%.
- Five-year context: $85.9B (2021), $75.4B (2022), $73.3B (2023), low point in 2024.
- Illicit share of total on-chain volume: 1.2% in 2025 (down from 1.3% in 2024; peak 2.4% in 2023).
- Share of incoming flows to virtual asset service providers (VASPs) going to illicit entities: 2.7% in 2025 (2.9% in 2024; 6.0% in 2023).
What drove the surge
TRM points to sanctions-related activity as a primary engine behind the spike. The report highlights roughly $72 billion in inflows tied to an “A7A5” token and another $39 billion connected to an “A7” wallet cluster. This surge was highly concentrated and heavily tied to Russia-linked actors, including platforms and entities identified by TRM such as Garantex, Grinex, and A7.
Geopolitics and the institutionalization of crypto rails
Beyond specific clusters, TRM documents a broader shift: state and state-aligned actors are increasingly integrating crypto into their core financial infrastructure rather than using it only as a last-resort channel. While Russia-linked networks were the main contributors to sanctions-related flows in 2025, the report warns of a widening trend in which sanctioned actors globally are professionalizing and institutionalizing crypto payment rails.
China’s role expands
China remains a major hub for illicit crypto activity, particularly as a base for underground financial services. TRM’s analysis shows explosive growth in activity tied to Chinese-language escrow and underground banking networks — adjusted crypto volumes associated with these networks grew from roughly $123 million in 2020 to more than $103 billion in 2025.
What it means
The raw dollar surge signals growing geopolitical and organized-crime pressures on the crypto ecosystem, even as illicit transactions account for a smaller slice of total on-chain volume. For regulators, exchanges, and compliance teams, TRM’s findings underscore the importance of targeting concentrated sanctions-linked clusters and tracking the increasing sophistication of state-aligned and underground financial networks.
Source: TRM Labs. (Featured image: DALL·E; chart: TradingView)
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