The world’s top financial crime watchdog has a message for governments dragging their feet on crypto regulation: time’s up. The Financial Action Task Force published a Targeted Report on Stablecoins and Unhosted Wallets on March 3, 2026, and the findings make for uncomfortable reading across the industry.
The core problem, according to FATF, is that criminal networks have figured out stablecoins are remarkably useful tools. Drug traffickers, terrorist financiers, and groups linked to North Korea have all shifted toward stablecoin-based transactions, often routed through peer-to-peer transfers and unhosted wallets that sidestep traditional financial gatekeepers entirely.
The 84% problem
According to data from Chainalysis cited in the FATF report, stablecoins accounted for 84% of all illicit virtual asset transaction volume in 2025.
By mid-2025, more than 250 stablecoins were in circulation with a combined market cap exceeding $300 billion. When an asset class grows that large, it attracts everyone, including people whose financial activities tend not to appear in annual reports.
