The post Variant Fund’s CLO Criticizes NYT on Stablecoins’ Illicit Use, Tether Boosts Sanctions Compliance appeared on BitcoinEthereumNews.com. Stablecoins have seen increased use in illicit activities, with over $25 billion in suspicious transactions in 2024 according to Chainalysis data. However, they represent less than 1% of global illicit flows, and issuers like Tether are actively freezing criminal funds to maintain financial integrity. Stablecoins now account for 63% of illicit on-chain volumes in 2024, surpassing Bitcoin’s share from previous years. Industry leaders criticize media reports for overstating risks, emphasizing crypto’s overall low involvement in crime. Crypto hacks reached $3.25 billion in 2025 year-to-date, marking an 8.2% rise from 2024, driven by major exchange breaches. Discover how stablecoins factor into illicit crypto activities in 2025, from money laundering trends to industry countermeasures. Stay informed on the real impact and protective measures being implemented today. What Are Stablecoins and Their Role in Illicit Finance? Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar, designed to minimize volatility and facilitate efficient transactions. In the context of illicit finance, they have gained prominence due to their liquidity and ease of transfer, with Chainalysis reporting over $25 billion in suspicious stablecoin transactions in 2024. Despite this, experts note that stablecoins enhance financial access for legitimate users while issuers implement robust monitoring to curb misuse. Source: X How Do Stablecoins Compare to Other Cryptocurrencies in Criminal Activity? Stablecoins have overtaken Bitcoin in illicit on-chain volumes, comprising 63% of such activities in 2024 per Chainalysis analysis. In 2020, Bitcoin dominated with over 75% due to its liquidity, but stablecoins’ stability makes them ideal for value preservation during illegal transfers. This shift highlights the need for enhanced blockchain forensics; however, total crypto illicit flows remain at just 0.14% of global crime, a figure stable below 1% for five years. Tether, the leading stablecoin provider, has frozen over $3 billion in suspicious assets through collaborations with… The post Variant Fund’s CLO Criticizes NYT on Stablecoins’ Illicit Use, Tether Boosts Sanctions Compliance appeared on BitcoinEthereumNews.com. Stablecoins have seen increased use in illicit activities, with over $25 billion in suspicious transactions in 2024 according to Chainalysis data. However, they represent less than 1% of global illicit flows, and issuers like Tether are actively freezing criminal funds to maintain financial integrity. Stablecoins now account for 63% of illicit on-chain volumes in 2024, surpassing Bitcoin’s share from previous years. Industry leaders criticize media reports for overstating risks, emphasizing crypto’s overall low involvement in crime. Crypto hacks reached $3.25 billion in 2025 year-to-date, marking an 8.2% rise from 2024, driven by major exchange breaches. Discover how stablecoins factor into illicit crypto activities in 2025, from money laundering trends to industry countermeasures. Stay informed on the real impact and protective measures being implemented today. What Are Stablecoins and Their Role in Illicit Finance? Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar, designed to minimize volatility and facilitate efficient transactions. In the context of illicit finance, they have gained prominence due to their liquidity and ease of transfer, with Chainalysis reporting over $25 billion in suspicious stablecoin transactions in 2024. Despite this, experts note that stablecoins enhance financial access for legitimate users while issuers implement robust monitoring to curb misuse. Source: X How Do Stablecoins Compare to Other Cryptocurrencies in Criminal Activity? Stablecoins have overtaken Bitcoin in illicit on-chain volumes, comprising 63% of such activities in 2024 per Chainalysis analysis. In 2020, Bitcoin dominated with over 75% due to its liquidity, but stablecoins’ stability makes them ideal for value preservation during illegal transfers. This shift highlights the need for enhanced blockchain forensics; however, total crypto illicit flows remain at just 0.14% of global crime, a figure stable below 1% for five years. Tether, the leading stablecoin provider, has frozen over $3 billion in suspicious assets through collaborations with…

Variant Fund’s CLO Criticizes NYT on Stablecoins’ Illicit Use, Tether Boosts Sanctions Compliance

2025/12/08 20:37
  • Stablecoins now account for 63% of illicit on-chain volumes in 2024, surpassing Bitcoin’s share from previous years.

  • Industry leaders criticize media reports for overstating risks, emphasizing crypto’s overall low involvement in crime.

  • Crypto hacks reached $3.25 billion in 2025 year-to-date, marking an 8.2% rise from 2024, driven by major exchange breaches.

Discover how stablecoins factor into illicit crypto activities in 2025, from money laundering trends to industry countermeasures. Stay informed on the real impact and protective measures being implemented today.

What Are Stablecoins and Their Role in Illicit Finance?

Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar, designed to minimize volatility and facilitate efficient transactions. In the context of illicit finance, they have gained prominence due to their liquidity and ease of transfer, with Chainalysis reporting over $25 billion in suspicious stablecoin transactions in 2024. Despite this, experts note that stablecoins enhance financial access for legitimate users while issuers implement robust monitoring to curb misuse.

Source: X

How Do Stablecoins Compare to Other Cryptocurrencies in Criminal Activity?

Stablecoins have overtaken Bitcoin in illicit on-chain volumes, comprising 63% of such activities in 2024 per Chainalysis analysis. In 2020, Bitcoin dominated with over 75% due to its liquidity, but stablecoins’ stability makes them ideal for value preservation during illegal transfers. This shift highlights the need for enhanced blockchain forensics; however, total crypto illicit flows remain at just 0.14% of global crime, a figure stable below 1% for five years. Tether, the leading stablecoin provider, has frozen over $3 billion in suspicious assets through collaborations with global authorities, demonstrating proactive compliance.

Source: Chainalysis

The New York Times recently published a report portraying stablecoins as a primary tool for money launderers and sanctions evaders, particularly among Russian entities and terrorist groups. The article, drawing on Chainalysis data, claimed these dollar-pegged tokens moved $25 billion in illicit funds in 2024 alone, potentially weakening U.S. foreign policy by bypassing traditional banking restrictions. Jake Chervinsky, Chief Legal Officer at Variant Fund, a prominent crypto venture capital firm, dismissed the piece as a “hit piece,” arguing it unfairly targets stablecoins—the most straightforward innovation in improving global finance.

Chervinsky’s critique underscores a broader industry sentiment that media narratives often amplify crypto’s risks while downplaying its benefits and safeguards. Stablecoins enable faster, cheaper cross-border payments for millions in underserved regions, far outweighing isolated criminal applications. Regulatory bodies, including the U.S. Treasury, acknowledge this duality, pushing for balanced frameworks that preserve innovation without stifling it.

Frequently Asked Questions

Are Stablecoins the Main Driver of Crypto Money Laundering in 2025?

Stablecoins do facilitate a significant portion of on-chain illicit transactions, accounting for 63% in 2024 according to Chainalysis, but they represent only 0.14% of all global illicit financial activity. Issuers like Tether actively monitor and freeze funds, having immobilized over $3 billion to date, ensuring compliance with international sanctions.

What Impact Do Crypto Hacks Have on Stablecoin Security?

Crypto hacks in 2025 have totaled $3.25 billion year-to-date, an 8.2% increase from 2024, often targeting exchanges handling stablecoins. While these incidents highlight vulnerabilities, they also prompt stronger security protocols, such as multi-signature wallets and real-time monitoring, to protect stablecoin holdings and maintain user trust in the ecosystem.

Source: Peckshield/COINOTAG

The Bybit exchange hack in February 2025 stands out as the year’s largest, with thieves siphoning substantial assets, including stablecoins. November’s incidents spiked to $194 million, largely from the Balancer protocol breach, illustrating how DeFi platforms remain prime targets. Year-over-year, stolen funds rose 24% from 2023’s $2.6 billion, reflecting evolving attack sophistication amid growing crypto adoption.

Source: Peckshield/COINOTAG

Despite these challenges, the crypto sector’s resilience is evident. Blockchain analytics firms like Chainalysis provide critical tools for tracing funds, aiding law enforcement in recoveries. Tether’s T3 Financial Crime Unit, launched in October 2025, exemplifies this commitment by freezing $300 million in linked assets and forging partnerships with investigative agencies worldwide.

Key Takeaways

  • Media Scrutiny on Stablecoins: Reports like the New York Times article highlight stablecoins’ role in $25 billion of 2024 illicit flows, but experts like Jake Chervinsky argue this overlooks their broader financial benefits.
  • Low Overall Risk: Crypto, including stablecoins, accounts for under 1% of global illicit activity over the past five years, per Chainalysis, with stablecoins now at 63% of on-chain crime due to liquidity advantages.
  • Heightened Security Measures: With 2025 hacks reaching $3.25 billion, issuers and exchanges are bolstering defenses—consider auditing your wallet and using regulated platforms for safer transactions.

Conclusion

Stablecoins continue to play a dual role in the evolving landscape of illicit finance and legitimate innovation in 2025, as evidenced by Chainalysis data and critiques from figures like Jake Chervinsky. While their use in suspicious activities has grown, representing 63% of on-chain illicit volumes, the industry’s response—through freezing billions in funds and advancing monitoring—reinforces accountability. As regulatory frameworks mature, stablecoins promise to strengthen global finance; stakeholders should prioritize secure practices to harness these benefits responsibly.

Source: https://en.coinotag.com/variant-funds-clo-criticizes-nyt-on-stablecoins-illicit-use-tether-boosts-sanctions-compliance

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