Illicit cryptocurrency transactions reached a record $154 billion in 2025, marking a 162% year-over-year increase, according to Chainalysis' 2026 Crypto Crime Report. Despite this surge, illicit activity still accounts for less than 1% of total onchain transactions, underscoring the predominance of legitimate crypto usage. The report highlights a 694% increase in funds received by sanctioned entities, contributing significantly to the rise in illicit flows. Stablecoins have become the preferred medium for these transactions, comprising 84% of illicit volumes due to their low volatility and high liquidity. Chainalysis emphasizes that while illicit activity has grown, the broader crypto ecosystem remains largely legitimate. The report suggests that with sound regulation, blockchain technology could enhance financial inclusion and support economic recovery in regions with limited banking services.