FATF Flags Peer-to-Peer Stablecoin Transfers as Top Money Laundering Risk

Peer-to-peer stablecoin transfers have develop into a “key vulnerability” contributing to cash laundering, terrorist financing, and sanctions evasion, in accordance with a report by the Monetary Motion Job Pressure (FATF), an intergovernmental physique established by G7 international locations to set international anti-money laundering requirements.

In a report launched Tuesday, the Monetary Motion Job Pressure mentioned that stablecoins are more and more being utilized in illicit finance schemes when transactions happen immediately between unhosted wallets, the place customers management their very own non-public keys, posing heightened monetary crime dangers as a result of they happen exterior regulated intermediaries.

“Stablecoin issuers are inspired to implement technical measures to have the ability to block, freeze, and withdraw stablecoins at any time if there are (meant) transactions to or from non-allow-listed or deny-listed wallets,” the worldwide anti-money-laundering watchdog mentioned, noting that such features might assist authorities disrupt illicit exercise tied to flagged blockchain addresses.

Stablecoins and regulators

The warning comes amid rising regulatory concern over the expansion of stablecoins and their rising use throughout the digital asset ecosystem.

The Monetary Motion Job Pressure cited a latest Chainalysis report outlining how stablecoins have develop into the dominant asset in illicit crypto exercise, accounting for about 84% of the $154 billion in illicit cryptocurrency transactions recorded in 2025.

The company mentioned that greater than 250 stablecoins have been circulating globally by mid-2025, with CoinGecko information displaying the sector presently stands at a market cap of roughly $314 billion.

The report additionally highlights that stablecoins’ core options, together with value stability, liquidity, and cross-border transferability, make them enticing for legal networks.

Risk actors often use stablecoins in advanced laundering chains to obscure the origin of funds, usually layering transactions throughout a number of wallets or blockchains earlier than changing them into fiat foreign money by means of exchanges or over-the-counter brokers, the FATF mentioned in its report.

“In comparison with extra risky belongings comparable to Bitcoin (BTC) or Ether (ETH), stablecoins like USDT (Tether) and USDC (Circle) supply a comparatively secure medium for shifting proceeds,” the company famous.

The report mentioned North Korean state-linked cyber teams have more and more used stablecoins to launder proceeds from cybercrime and convert stolen crypto earlier than cashing out by means of over-the-counter brokers or peer-to-peer platforms.

In the meantime, Iranian actors, together with these linked to the Islamic Revolutionary Guard Corps, have leveraged stablecoins and different digital belongings to finance proliferation actions, receive drone elements and high-tech tools, and switch funds to sanctioned teams within the area, in accordance with the watchdog.



The FATF and stablecoins

The brand new findings construct on earlier warnings from the FATF in regards to the increasing function of stablecoins in illicit finance.

In a June report final yr, the watchdog mentioned stablecoins already accounted for almost all of illicit on-chain exercise, estimating roughly $51 billion in crypto linked to fraud and scams in 2024.

It additionally emphasised the significance of implementing the “journey rule,” which requires monetary establishments and crypto service suppliers to share details about the sender and recipient of digital asset transfers.

The most recent report requires stronger oversight of stablecoin issuers, wider adoption of blockchain analytics instruments, and programmable compliance options, comparable to allow-lists and deny-lists constructed into sensible contracts, to forestall misuse as stablecoin adoption continues to develop globally.

Enable-listing permits solely pre-approved pockets addresses to transact in a stablecoin, whereas deny-listing blocks particular pockets addresses or entities from holding, receiving, or transferring the token.