Chainalysis’ latest Crypto Crime Report has shed light on the alarming revelation that criminals and their networks now hold a staggering $75 billion in crypto assets acquired through illicit means. This data, tracked up to July 2025, highlights the extent of illicit entity balances in popular cryptocurrencies like BTC, ETH, and stablecoins, which have collectively reached nearly $15 billion. Furthermore, downstream wallets connected to these entities, receiving more than 10% of their funds from illicit sources, hold a whopping $60 billion.
This substantial increase in illicit crypto holdings, amounting to a 359% surge from 2020 levels, underscores the growing prevalence of criminal activity in the crypto space. Darknet markets emerge as the dominant category in criminal crypto asset holdings, controlling over $46.2 billion in on-chain value. These markets have long been associated with cryptocurrency adoption, with platforms like Silk Road paving the way back in 2011. Additionally, wallets linked to darknet markets have benefited from years of price appreciation, further bolstering their substantial holdings.
Money laundering platforms, such as Black U, serve as crucial transit points for moving illicit funds through various infrastructures, potentially inflating total downstream holdings beyond reported figures. While scammers and darknet markets demonstrate swift money movement, hackers encounter operational hurdles in laundering large volumes, resulting in prolonged on-chain asset retention. The recent $1.5 billion Bybit hack linked to North Korea exemplifies the challenges hackers face in off-ramping significant sums without raising suspicion.
In various illicit activity categories like stolen funds, ransomware, and darknet markets, over 50% of balances are concentrated in the top three wallets. However, exceptions like terrorist financing and child abuse material exhibit distributed balances across multiple wallets due to their transient nature. The type of asset also influences concentration patterns, with stablecoins showing less concentration compared to BTC or ETH, likely due to the risk of freezing by centralized issuers in case of illicit activity.
Centralized exchanges remain primary cash-out points for criminals looking to convert crypto to fiat, despite stringent KYC and AML regulations. However, direct transfers from illicit entities to exchanges have significantly declined, indicating criminals’ adaptation to compliance efforts through additional layering steps like mixers and cross-chain bridges. Data reveals that occasional crimes have the shortest lifespans, with 50% of wallets receiving no further inflows post-incident, while darknet markets and fraud shops operate for longer durations due to network effects and established reputations.
Law enforcement agencies face challenges in seizing permissionless cryptocurrencies like BTC, requiring private keys or intercepting funds at centralized off-ramps. To effectively capture these assets, authorities need expedited seizure powers, cross-border cooperation frameworks, and technical expertise in blockchain analytics tools. By coordinating action and implementing necessary measures, billions in illicit proceeds sitting on public blockchains are theoretically seizable.
In conclusion, the prevalence of criminal activity in the crypto space underscores the need for proactive measures by law enforcement to combat illicit holdings and protect the integrity of the digital asset ecosystem. The insights provided by Chainalysis’ report serve as a stark reminder of the ongoing challenges posed by criminal networks in the crypto landscape.