Key Takeaways:
- Crypto is mainstream: With a market value of around USD 2.4 trillion, crypto has become deeply intertwined with traditional finance – increasing institutional exposure to both risks and regulatory obligations.
- Stablecoin surge: On-chain stablecoin settlement grew by ~140% YoY in 2024 (an estimated USD 18.4 trillion), driving stricter oversight through frameworks like the EU MiCA and the GENIUS Act, the US stablecoin legislation.
- Evolution of crypto crimes: Although overall illicit volumes declined, new crypto crime typologies are fueling ransomware, hacks, sanctions evasion, and fraud, making AML far more complex.
- Regulators are catching up on crypto compliance: The EU MiCA, the US GENIUS Act, and Singapore’s MAS/DTSP are bringing structure and accountability to the crypto landscape.
- Fiat-based controls fall short: Conventional fiat-based AML tools struggle to monitor chain-hopping, bridging, and off-chain activity. Financial institutions need real-time transparency to meet rising regulatory expectations.
- AI-driven behavioral analytics as the new frontier: AI, behavioral analytics, and real-time monitoring enable detection of velocity spikes, increase in frequency, token swapping, and bridge hopping – providing a clearer, contextual picture of crypto risk than traditional threshold-based systems.
In the last few years, cryptocurrency has evolved from an edge-case scenario into an asset market of approximately USD 2.4 trillion.1 With MiCA and AMLA framework, the EU is leading global regulatory efforts, with 2747 compliant CASPs (Crypto-Asset Service Providers) registered in 2024 alone.2 As financial institutions adopt or partner with these platforms, the divide between traditional and decentralized finance continues to narrow.
Stablecoins are playing a key role in bridging this divide, with payment firms like Coinbase, Stripe, and MetaMask expanding their infrastructure, and institutional players like Visa, Bank of America, and Citi deepening their engagement. Stablecoin transactions surged by 140% year-on-year in 2024 to an estimated USD 18.4 trillion.3
Just as global usage accelerates, so does exposure to illicit activity. Traditional financial institutions can be indirectly implicated in crypto-related financial crimes through payments, custody, correspondent relationships, or client activities. As crypto becomes mainstream, financial institutions must ensure their compliance frameworks keep pace.
The State of Crypto Crimes in 2025
Crypto-related crime spans sanction evasions, ransomware attacks, hacks, and fraud, increasingly spilling from digital networks into the physical world.
In H1 2025 alone, there were 119 verified hacking incidents resulting in USD 3 billion stolen and only 4.2% of the assets recovered.4 During the same period, ransomware attacks accounted for USD 460 million in losses. Over the past 18 months, 231 violent incidents — including kidnappings, home invasions, and coercion targeting digital asset holders — have been documented.5
Crypto Crime Typologies
Crypto-related crimes generally fall into the following categories:
- Sanction Evasion
A workaround for sanctioned entities. Techniques include mixing services to obscure transaction origins. Privacy coins like Monero, and encrypted messaging platforms such as Telegram and Signal are common tools to hide identity and origin. Fake KYC, unhosted wallets, and decentralized bridges are also used in terrorist financing.
- Hacked Addresses
Some of the biggest hacks in the past years, like those carried out by the Lazarus Group, have leveraged zero-day exploits, compromised private keys, social engineering, malware, trojan attacks, or smart contract vulnerabilities.
- Fraud
Scams such as investment fraud or “pig butchering” (a type of online scam where fraudsters gain the trust of victims over time and then deceive them into investing in fake crypto assets) remain rampant. In October 2025, the US Department of Justice seized USD 15 million worth of Bitcoin from a pig butchering scam from Cambodia.6
- Ransomware Attacks
Threatening to release private data, holding up sensitive supply chains, phishing, and increasingly, AI-generated deepfakes are used to extort victims, threatening to leak private data or halt operations until ransom is paid in crypto.
- Digital-to-Physical Crossover
The most alarming development in crypto crimes. In one extreme case in France, a crypto founder was abducted during a ransom attempt, a stark reminder that virtual wealth now carries real-world danger.7
The volatility and speed of crypto transactions now mirror the escalating sophistication of the crimes behind them. To stay ahead, financial institutions must strengthen their crypto risk visibility, real-time monitoring, and AML frameworks to detect these evolving threats before they cause real damage.
Global Crypto Regulations
Despite the growing speed and complicated risks, the total volume of crypto crimes fell 40% to USD 10.7 billion in 2024, largely due to fewer large-scale Ponzi and pyramid schemes.8 Sanctions-related inflows also fell and the Western darknet market shrank compared to Russia.9
Regulations from across the globe and increasing pressure on both service providers and crypto issuers are driving this decline.
- The EU’s MiCA, enforced in mid-2023, requires issuers to follow reserve, transparency, licensing, and consumer protection regulations.
- The GENIUS Act, passed in the US, regulates stablecoins and requires backing by liquid assets, full disclosure of reserves, and issuers are subject to AML, sanctions, and regulatory provisions.10
- In APAC, Singapore passed the MAS/DTSP Rule that requires providers to be licensed, with non-compliance carrying heavy fines. It also focuses on managing tech risks, governance, and capital requirements.11
The European Banking Authority’s recently published Report on Tackling ML/TF Risks in Crypto-asset Services Through Supervision has uncovered many entities are operating without regulatory approval, forum shopping, and reverse soliciting.12
Regulators worldwide have made it clear that traditional financial institutes must incorporate crypto in their AML obligations and ensure all crypto related touchpoints are compliant or face regulatory and reputational consequences.
A New Framework for Crypto AML Monitoring
The EBA report urges FIs to improve traceability, transaction monitoring, compliance, and data protection.13 It highlights that many CASPs and financial firms haven’t updated their AML/CFT controls and risk assessment to address crypto-related risks, leaving them more likely to be exploited.
As crypto AML regulations become enforceable, the biggest challenge Financial Institutions (FIs) face lies in achieving visibility into secondary market transactions, such as cross-chain swaps, decentralized exchanges (DEXs), and bridges, where funds can move rapidly and anonymously beyond the reach of traditional monitoring.
To stay ahead of emerging risks, financial institutions need a modernized framework that incorporates the following elements:
- Well-Defined Crypto Policy & Onboarding Standards
Counterparty assessment that includes KYC, name matching, beneficial ownership and a clear picture of chain of origin, wallet behavior, and exposure to risky chains and privacy coins — strengthening overall risk scoring and customer profiling.
- Real-Time Crypto Monitoring Across Secondary & Cross-Chain Activities
With an estimated 33% of cross-chain investigations involving three or more blockchains,13 financial institutions must leverage third-party intelligence and blockchain analytics to trace movements across chains and detect obfuscation patterns.
- Crypto AML in the Broader Risk Framework
Events like the Coinbase breach14 and LinkedIn DMM Bitcoin15 hack illustrate that crypto-fiat crossover attacks are increasing. Financial institutions should monitor velocity, frequency, and counterparty behavior across both asset classes — applying the same rigor used in fiat transaction monitoring.
- AI-Powered Behavioral Analytics
Advanced AI-driven behavioral analytics can identify complex fraud patterns such as rapid swaps, bridging, multiple token conversions, or mixing — techniques often used by organized crime networks to mask illicit flows.
- Training & Policy Alignment
Compliance teams need continuous training on emerging crime typologies, regulatory crypto policies, and well-defined internal policy standards to maintain vigilance and ensure consistent application of crypto AML practices.
The EBA report also notes that supervisors are increasingly investing in SupTech (the use of advanced technology by regulators to enhance oversight) and blockchain forensics to visualize and monitor cross-chain activity, expecting financial institutions to adopt similarly dynamic, data-driven monitoring.
How Siron®One Strengthens Crypto AML Compliance
Siron®One enables financial institutions to bridge the gap between traditional and crypto AML, helping them stay compliant with emerging regulations and manage crypto-related risks effectively.
- Policy-Based Controls and Automated Rule Sets
Apply configurable business rules and internal crypto policies to identify and control transactions linked to Virtual Asset Service Providers (VASPs), enforce jurisdiction-based restrictions, and flag customers engaging in crypto activity without sufficient KYC verification
- Enhanced Risk Scoring and Monitoring
Extend your AML monitoring framework to include crypto exposure by detecting and assessing transactions to and from known exchanges or VASPs/CASPs, incorporating external risk data to classify counterparties by their compliance posture.
- Regulatory Audit Trail
Get end-to-end transparency for transactions involving virtual assets, ensuring full documentation for travel rule compliance and VASP/CASP reporting requirements.
- Unified Case Management & Alert Handling
Investigate fiat and crypto-related alerts within a single environment, providing investigators with a consolidated view of customer risk and transaction context.
- Integrated Intelligence Ecosystem
Through partnerships with specialized
By combining AI, industry-leading intelligence, and human expertise, Siron®One empowers institutions to manage crypto risk exposure while ensuring compliance with evolving supervisory standards.
To learn more, download the Crypto AML whitepaper.
Sources:
- https://www.jbs.cam.ac.uk/wp-content/uploads/2024/10/2024-2nd-global-cryptoasset-regulatory-landscape-study.pdf
- https://coincub.com/ranking/vasp-registration-report-2024/
- https://www.citigroup.com/rcs/citigpa/storage/public/GPS_Report_Stablecoins_2030.pdf
- https://www.wtwco.com/en-ca/insights/2025/09/why-h1-2025-s-crypto-crime-trends-change-the-risk-equation
- https://www.crisis24.com/articles/crypto-kidnappings-the-rise-of-violent-crime-in-the-age-of-digital-wealth
- https://www.cnbc.com/2025/10/14/bitcoin-doj-chen-zhi-pig-butchering-scam.html
- https://www.theguardian.com/technology/2025/jun/28/cryptocurrency-hacks-kidnappings-crime
- https://www.trmlabs.com/resources/blog/report-teaser-proportion-of-illicit-volume-of-crypto-dropped-51-in-2024
- https://www.trmlabs.com/resources/blog/crypto-crime-in-russia-ransomware-sanctions-evasion-and-disinformation
- https://www.reuters.com/sustainability/boards-policy-regulation/us-senate-passes-stablecoin-bill-milestone-crypto-industry-2025-06-17/
- https://www.asianfin.com/articles/127191
- https://www.eba.europa.eu/publications-and-media/press-releases/supervisors-should-learn-recent-cases-prevent-financial-crime-crypto-firms-eba-says
- https://cointelegraph.com/news/crosschain-swaps-move-21b-illicit-funds-up-200-two-years-elliptic
- https://www.reuters.com/sustainability/boards-policy-regulation/coinbase-breach-linked-customer-data-leak-india-sources-say-2025-06-02/
- https://cryptoslate.com/fbi-reveals-north-korea-used-linkedin-to-steal-305-million-from-japans-dmm-bitcoin/
