Illicit crypto activity surged in 2025 as nation states and professional criminal networks expanded on-chain operations. Government-linked actors used infrastructure built for organised cybercrime, increasing risks for regulators and security teams.
Data shows that illicit crypto addresses received at least $154 billion during the year, representing a 162% increase compared to 2024. Sanctioned entities drove much of the growth, with stablecoins making up 84% of illicit transactions due to their liquidity and ease of cross-border transfer.
North Korea remained the most aggressive state actor, with hackers stealing around $2 billion, including the record-breaking Bybit breach. Russia’s ruble-backed A7A5 token saw over $93 billion in sanction-evasion transactions, while Iran-linked networks continued using crypto for illicit trade and financing.
Chinese money laundering networks also emerged as a central force, offering full-service criminal infrastructure to fraud groups, hackers, and sanctioned entities. Links between crypto and physical crime grew, with trafficking and coercion increasingly tied to digital asset transfers.
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Around $500 million in bonds issued by Telegram remain frozen within Russia’s financial settlement system following the application of international sanctions.
The situation reflects how global regulatory measures can continue to affect corporate assets even when companies operate across multiple jurisdictions.
According to reports, the frozen bonds were issued in 2021 and are held at Russia’s National Settlement Depository.
Telegram said its more recent $1.7 billion bond issuance in 2025 involved international investors, with no participation from Russian capital, and was purchased mainly by institutional funds based outside Russia.
Telegram stated that bond repayments follow established international procedures through intermediaries, meaning payment obligations are fulfilled regardless of whether individual bondholders face restrictions.
Financial results for 2025 also showed losses, linked in part to a decline in cryptocurrency valuations, which reflected broader market conditions rather than company-specific factors.
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World Liberty Financial’s WLTC Holdings LLC has applied with the Office of the Comptroller of the Currency to establish World Liberty Trust Company, National Association (WLTC), a national trust bank designed for stablecoin operations.
The move aims to centralise issuance, custody, and conversion of USD1, the company’s dollar-backed stablecoin. USD1 has grown rapidly, reaching over $3.3 billion in circulation during its first year.
The trust company will serve institutional clients, providing stablecoin conversion and secure custody for USD1 and other supported stablecoins.
WLTC will operate under federal supervision, offering fee-free USD1 issuance and redemption, USD conversion, and custody with market-rate conversions. Operations will comply with the GENIUS Act and follow strict AML, sanctions, and cybersecurity protocols.
The stablecoin is fully backed by US dollars and short-duration Treasury obligations, operating across ten blockchain networks, including Ethereum, Solana, and TRON.
By combining regulatory oversight with full-stack stablecoin services, WLTC seeks to provide institutional clients with clarity and efficiency in digital asset operations.
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In the US, Morgan Stanley has moved to launch exchange-traded funds linked to Bitcoin and Solana, signalling that major banks are no longer prepared to watch the crypto market from the sidelines.
Filings submitted to the Securities and Exchange Commission show the bank intends to offer funds tied to the prices of both crypto assets, making it the first of the ten biggest US banks by assets to pursue crypto ETFs directly.
Interest from Wall Street has been strengthened by regulatory changes introduced under the Trump administration, which created clearer rules for stablecoins and crypto-related investment products.
BlackRock’s Bitcoin ETFs have already become a major source of revenue, encouraging banks to seek a more active role instead of limiting themselves to custody services.
The trend is expected to have implications for European investors. US-listed crypto ETFs cannot normally be sold to retail investors in the EU because they do not comply with UCITS requirements.
The shift suggests crypto has become too commercially significant for Wall Street institutions to ignore, with banks increasingly treating digital assets as part of mainstream financial services rather than a peripheral experiment.
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A significant shift away from global views on central bank digital currencies has been made with the decision to allow China’s digital yuan to earn interest starting in January 2026. Wallet balances will now accrue interest at demand deposit rates, marking a shift from the widely held view that retail CBDCs should function purely as digital cash.
Central banks in Europe and the United States have long argued against interest-bearing CBDCs, warning they could destabilise financial systems by drawing deposits away from commercial banks.
Institutions such as the European Central Bank, the Federal Reserve and the Bank for International Settlements have stressed that digital currencies should not become savings instruments.
China’s move, however, effectively repositions the digital yuan closer to a deposit-like form of money rather than a simple cash substitute.
The policy applies to verified individual and corporate wallets, while anonymous wallets remain excluded. Digital yuan balances are also now covered by China’s deposit insurance scheme, offering the same protection as bank deposits.
Analysts say these design choices, combined with China’s two-tier distribution model that keeps commercial banks as intermediaries, aim to limit risks of bank disintermediation while encouraging wider adoption.
China’s decision could influence global debates as dozens of countries continue to explore the use of digital currencies. While Europe remains committed to a non-interest-bearing digital € and the United States has formally banned a retail CBDC, China is testing whether an interest-paying digital currency can coexist with traditional banking.
The experiment is likely to be closely watched as policymakers reconsider what role digital money should play in future financial systems.
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The Bank of Russia has reiterated its confidence in the long-term potential of the digital ruble, describing the project as one of the most advanced central bank digital currency initiatives globally.
According to the regulator, preparations for a large-scale rollout remain on track for 2026, with internal estimates suggesting the digital ruble could represent up to 5% of all cashless payments within seven years of launch.
Central bank officials highlighted smart contracts as a primary area of application, alongside budgetary payments and cross-border transaction mechanisms, where efficiency and transparency gains are expected.
The regulator added that global payment trends are being closely monitored. Officials stressed the importance of defining a clear role for each financial instrument rather than introducing technology without a specific economic purpose.
Bank of Russia officials also emphasised ongoing collaboration with market participants to identify new opportunities for the digital ruble and maximise its practical impact.
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China’s central bank has confirmed that a revised digital yuan framework will enter force on 1 January 2026, redefining the e-CNY as a form of digital deposit money rather than a cash substitute.
The upgraded framework adds new standards and rules, based on a decade of domestic and cross-border pilot programmes. Usage already spans retail payments, public services, healthcare, education, tourism, and international settlements.
Under the new plan, digital yuan balances held in commercial bank wallets will be classified as bank deposit liabilities. Banks must pay interest on these holdings, which will be insured and included in regular asset-liability management.
Digital yuan operations will also be folded into China’s reserve requirement system. Wallet balances at authorised banks will count towards reserve calculations, while non-bank payment institutions must hold full reserves against the digital yuan they administer.
By late November 2025, cumulative transactions had reached 3.48 billion, with a total value of 16.7 trillion yuan.
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A recent SmartAsset study based on IRS tax return data highlights sharp regional differences in Bitcoin participation across the US. Crypto engagement is concentrated in certain states, driven by income, tech adoption, and local economic culture.
Washington leads the rankings, with 2.43 per cent of taxpayers reporting crypto transactions, followed by Utah, California, Colorado and New Jersey. These states have strong tech sectors, higher incomes, and populations familiar with digital financial tools.
New Jersey’s position also shows that crypto interest extends beyond traditional tech hubs in the West. At the opposite end, states such as West Virginia, Mississippi, Kentucky, Louisiana and Alabama record participation close to or below one per cent.
Lower household incomes, smaller tech industries and a preference for conventional financial products appear to limit reported crypto activity, although some low-level holdings may not surface in tax data.
The data also reflects crypto’s sensitivity to market cycles. Participation surged during the 2021 bull run before declining sharply in 2022 as prices fell.
Higher-income households remain far more active than middle-income earners, reinforcing the view that Bitcoin adoption in the US is still largely speculative and unevenly distributed.
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Sberbank has issued Russia’s first crypto-backed loan, providing financing to Intelion Data, one of the country’s largest Bitcoin miners. The bank did not disclose the loan size or the cryptocurrency used as collateral but described the move as a pilot project.
The loan leveraged Sberbank’s own cryptocurrency custody solution, Rutoken, ensuring the digital assets’ safety throughout the loan period. The bank plans to offer similar loans and collaborate with the Central Bank on regulatory frameworks.
Intelion Data welcomed the deal, calling it a milestone for Russia’s crypto mining sector and a potential model for scaling similar financing across the industry. The company is expanding with a mining centre near the Kalinin Nuclear Power Plant and a gas power station.
Sberbank has also been testing decentralised finance tools and supports gradual legalisation of cryptocurrencies in Russia. VTB and other banks are preparing to support crypto transactions, while the Central Bank may allow limited retail trading.
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Trust Wallet has urged users to update its Google Chrome extension after a security breach affecting version 2.68 resulted in the theft of roughly $7 million. The company confirmed it will refund all impacted users and advised downloading version 2.69 immediately.
Mobile users and other browser extension versions were unaffected.
Blockchain security firms revealed that malicious code in version 2.68 harvested wallet mnemonic phrases, sending decrypted credentials to an attacker‑controlled server.
Around $3 million in Bitcoin, $431 in Solana, and more than $3 million in Ethereum were stolen and moved through centralised exchanges and cross‑chain bridges for laundering. Hundreds of users were affected.
Analysts suggest the incident may involve an insider or a nation-state actor, exploiting leaked Chrome Web Store API keys.
Trust Wallet has launched a support process for victims and warned against impersonation scams. CEO Eowyn Chen said the malicious extension bypassed the standard release checks and that investigation and remediation are ongoing.
The incident highlights ongoing security risks for browser-based cryptocurrency wallets and the importance of user vigilance, including avoiding unofficial links and never sharing recovery phrases.
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