Why Do Scammers Prefer Stablecoins?

Between 2020 and 2025, the cryptocurrency that criminals favored changed completely. In 2020, Bitcoin accounted for roughly 70% of illicit crypto transaction volume, while stablecoins made up around 15%. By 2025, those numbers had inverted: stablecoins represented approximately 85% of illicit transaction volume, and Bitcoin’s share had collapsed to about 7%. With more than $ 150 billion flowing through illicit crypto addresses during 2025, that shift matters enormously to anyone who holds, sends, or accepts digital assets.

So why do scammers prefer stablecoins? The short answer is that stablecoins offer everything a criminal need from a payment rail and nothing they fear.

They hold a steady value pegged to fiat currency, settle across borders in minutes, work in almost every country, carry deep liquidity, and convert easily into cash.

A scammer who steals $ 1 million in Bitcoin can watch that sum swing by tens of thousands of dollars overnight. A scammer who steals $ 1 million in USDT keeps $ 1 million.

Stablecoins combine the efficiency of cryptocurrency with the stability of fiat money. That combination makes them attractive to legitimate users and criminals alike — and understanding why is the first step toward protecting yourself.

For most of crypto's first decade, Bitcoin was the currency of the underground. Dark web markets priced goods in BTC. Ransomware operators demanded it. Early money launderers moved it through mixers and chains of fresh wallets. In 2020, that legacy still held: about 70% of illicit crypto volume traveled on Bitcoin rails.

An example of listings on the once-largest darknet marketplace, Silk Road. Note that the prices are listed in Bitcoins. Source: nbcnews

Bitcoin earned that role partly by being first and partly by being liquid. But it carried a flaw that criminals tolerated only because they had few alternatives — its price moved violently. Holding stolen or laundered value in Bitcoin meant accepting market risk on top of legal risk.

As the stablecoin market matured, criminals gained an alternative that removed Bitcoin's volatility problem without sacrificing speed or reach. The migration was steady and then sudden. Illicit actors followed the same logic as legitimate users: a dollar-pegged token that settles globally in seconds is simply a better instrument for moving money than a volatile commodity.

By 2025 the transition was nearly total. Stablecoins carried roughly 85% of illicit transaction volume, while Bitcoin had fallen to around 7%. Bitcoin did not become safer or less useful in absolute terms — it was outcompeted as a vehicle for moving value.

Top 5 cryptocurrencies by 24-hour trading volume. The most highly capitalized stablecoin, Tether (USDT), outperforms Bitcoin in this category by more than twofold. At the same time, BTC still remains the most capitalized cryptocurrency on the market. This means that transactions are conducted with Tether significantly more frequently than with Bitcoin. Source: CoinMarketCap

The broader figure frames the scale of the problem. More than $150 billion passed through illicit crypto addresses during 2025. The composition of that flow tells the real story: criminal money now overwhelmingly travels as stablecoins.

This is not because stablecoins are inherently lawless. The same properties that make them dominant in illicit flows — stability, speed, liquidity, accessibility — are the properties driving their mainstream adoption.

Criminals adopt the best available tools, and right now the best tool for moving value is a stablecoin.

A stablecoin is a cryptocurrency designed to hold a constant value, almost always pegged to a fiat currency such as the US dollar. One unit is meant to be worth one dollar at all times.

Issuers maintain that peg in different ways. The most common model is full reserve backing: for every token in circulation, the issuer holds an equivalent value in cash, short-term government debt, or similar liquid assets. When you redeem a token, the issuer hands over a dollar from reserves and removes the token from circulation.

Other designs use crypto collateral or algorithms, but reserve-backed fiat stablecoins dominate the market.

Because a stablecoin lives on a blockchain, it inherits the speed and programmability of crypto while behaving, in practice, like a digital dollar.

There are three broad categories.

Most everyday users will only ever touch fiat-collateralized stablecoins, and USDT and USDC together account for the overwhelming majority of trading and settlement.

Top 10 largest cryptocurrencies by market capitalization. Source: CoinMarketCap

What is a stablecoin's appeal in one sentence? It lets you hold and move dollars on a blockchain without a bank.

That answer explains the explosive adoption. People in countries with unstable currencies use stablecoins to preserve savings. Traders use them to park value between positions without leaving the crypto ecosystem. Businesses use them for cross-border payments that clear in minutes rather than days. Remittance senders use them to avoid expensive wire fees. The utility is real and broad — which is precisely why criminals find them so convenient too.

Stability is the single most important reason. A criminal moving illicit funds wants the value to survive the journey. Stolen Bitcoin can lose a fifth of its worth before it is laundered and cashed out. A stablecoin holds its value from the moment it is taken to the moment it is converted to local cash. For someone managing risk on the wrong side of the law, removing market volatility is a major advantage.

Stablecoins move internationally in seconds to minutes, with no banks, no business hours, and no correspondent network slowing them down. A scammer in one country can collect funds from a victim in another and forward them to a launderer in a third before any institution notices. Speed compresses the window for intervention.

Comparison of transaction speeds between Bitcoin and Tron TRC-20 tokens, such as USDT stablecoins issued on this standard.

On low-fee networks, moving large sums in stablecoins costs cents. That matters at scale. Laundering operations that route money through many hops would be expensive on high-fee rails; cheap transfers let criminals layer transactions freely to obscure the trail.

Stablecoins work anywhere with an internet connection. There is no application process, no credit check, and no geographic gatekeeper. For illicit networks operating across jurisdictions and outside the banking system, that borderless access is essential infrastructure.

Deep liquidity means a criminal can move large amounts without crashing the price or struggling to find a counterparty. Major stablecoins trade in enormous volumes on exchanges and peer-to-peer markets worldwide, so even sizeable illicit sums blend into normal flow.

The final step in any fraud is turning crypto into spendable money. Stablecoins convert into local currency through exchanges, over-the-counter desks, and peer-to-peer markets in nearly every country. The denser and more global the off-ramp network, the easier the cash-out — and stablecoins enjoy the densest network of all.

USDT is the most widely held and traded stablecoin on the planet. That ubiquity is its danger. When a criminal asks a victim to send USDT, the victim can almost always obtain it, and the criminal can almost always cash it out. Why do scammers ask for USDT? Because everyone, everywhere, can get it.

Information about Tether. Source: CoinMarketCap

A large share of USDT circulates on the Tron network, which offers fast settlement and very low fees. That combination makes Tron-based USDT especially attractive for high-volume movement of funds, and it appears heavily in illicit flows for the same practical reasons it appeals to ordinary users.

Top 10 networks by circulating USDT supply. Source: defillama

USDT dominates peer-to-peer trading, where individuals exchange crypto for cash directly. P2P markets are convenient and, in many regions, lightly supervised. That makes them a favored off-ramp for converting fraudulently obtained USDT into local currency with minimal friction.

In emerging markets with weak banking infrastructure or volatile local currencies, USDT often functions as a de facto dollar. Its deep penetration in these economies gives criminals a ready pool of counterparties and cash-out options — the same accessibility that makes it a lifeline for legitimate users in those same regions.

In a pig-butchering scam, a fraudster builds a relationship with a victim over weeks or months, then lures them onto a fake investment platform. The victim deposits stablecoins, sees fabricated gains, deposits more, and discovers the truth only when they try to withdraw. Stablecoins are the instrument of choice because their stable value lets scammers quote precise, believable returns.

Fake trading platforms, bogus crypto funds, and counterfeit yield products solicit deposits in stablecoins. The stable value makes the pitch easier — a scammer can promise "12% on your USDT" and have it sound like a savings product rather than a gamble.

Romance scammers cultivate emotional relationships online and eventually request money, often framed as an emergency or an investment opportunity. Stablecoins are requested because they are fast, irreversible, and easy for the victim to acquire.

Fraudulent exchanges mimic legitimate platforms, accept stablecoin deposits, and then block withdrawals or vanish entirely. Victims who deposit USDT or USDC believe they are funding a trading account; they are actually funding the scammer's wallet.

Stablecoin-denominated Ponzi schemes pay early participants with deposits from later ones, using the currency's stability to make returns look consistent and credible. The scheme collapses when new deposits dry up.

Beyond defrauding individuals, stablecoins are central to laundering the proceeds of other crimes. Launderers move illicit funds through chains of wallets, exchanges, and P2P trades to obscure their origin before cashing out. Stability and liquidity make stablecoins ideal for this layering.

Sanctioned entities and networks use stablecoins to move value outside the reach of the traditional banking system. Because stablecoins settle globally without correspondent banks, they have become a tool for circumventing financial restrictions — a use that draws intense scrutiny from regulators and investigators.

Public Blockchain Transparency

No. This is the most important and most misunderstood point about stablecoins. They are not anonymous. The major stablecoins run on public blockchains where every transaction is permanently recorded and visible to anyone. The ledger is open by design.

How Stablecoin Transactions Can Be Tracked

Each transfer is written to a public ledger that no one can edit or erase. Investigators trace the flow of funds from wallet to wallet, follow money across exchanges, and reconstruct the path of a transaction long after it happens. Blockchain analytics firms cluster related addresses, attribute wallets to known entities, and map criminal networks across the chain.

Platforms such as BitOK are used by investigators, exchanges, and compliance teams to perform exactly this kind of transaction analysis and wallet tracing.

An example of transaction path verification using Graph by BitOK.

The permanence of the ledger works against criminals: a record made today can be analyzed years from now.

Why Criminals Often Get Identified

Anonymity on a blockchain is really pseudonymity, and pseudonymity breaks at the edges. The moment illicit funds touch a regulated exchange that performs identity checks, the pseudonymous wallet connects to a real person. Blockchain investigations follow the trail to that connection point. Through wallet clustering, transaction monitoring, and cross-referencing with off-chain data, investigators routinely de-anonymize actors who believed the blockchain hid them. Transparency does not equal anonymity — it is closer to the opposite.

The same ecosystem that criminals exploit creates real stablecoin risks for ordinary holders. Understanding these stablecoin risks helps you avoid becoming a victim or, just as importantly, an unwitting participant in someone else's scheme.

Fraud Risks

The most direct stablecoin risk is being defrauded — sending funds to a scammer through any of the schemes above. Once a stablecoin transfer confirms, it cannot be reversed. There is no chargeback and no central authority to undo the payment.

Counterparty Risks

When you trade peer-to-peer or use an off-ramp, you may unknowingly transact with a high-risk counterparty — a wallet tied to stolen funds, fraud, or sanctioned activity. Receiving such funds can taint your own wallet's history and freeze you out of regulated services, even if you did nothing wrong.

Depegging Risks

A stablecoin is only as stable as its backing. If reserves are inadequate or confidence collapses, the token can lose its peg and trade below its intended value. Depegging events have wiped out value rapidly, particularly in algorithmic designs. This is a core consideration in any honest assessment of stablecoin risks.

Regulatory Risks

Stablecoins operate in a fast-moving regulatory environment. New rules can restrict how a stablecoin is used, where it can be traded, or who can hold it. A regulatory action against an issuer or a platform can affect access to your funds.

What to Expect from the CLARITY Act in 2026

Custody Risks

If you hold stablecoins on an exchange or custodial service, you depend on that platform's solvency and security. If it is hacked, becomes insolvent, or freezes withdrawals, your funds are at risk. Self-custody removes that dependency but shifts the burden of security entirely onto you.
Because of sanctions exposure, scam exposure, stolen-funds exposure, and the prevalence of high-risk counterparties, wallet screening and AML checks have moved from niche compliance tasks to mainstream necessities. Tools that draw on blockchain intelligence — BitOK among them — let exchanges, businesses, and increasingly individual users assess whether a wallet or transaction carries risk before funds change hands.

Yes — and this is a crucial difference from Bitcoin. The major fiat-backed stablecoin issuers retain the technical ability to freeze tokens at specific addresses. When law enforcement or an issuer identifies a wallet holding stolen or sanctioned USDT or USDC, the issuer can blacklist that address, rendering the tokens unusable. This centralized control has frozen hundreds of millions of dollars in illicit funds.

Minus $ 344 Million: The Story Behind One of Tether’s Largest-Ever Freezes

Verify Wallet Addresses

Always confirm a recipient's address through a trusted channel before sending. Address-swapping malware and copy-paste errors send funds to the wrong place permanently. For large transfers, send a small test amount first.

Perform AML Screening Before Sending Funds

AML screening checks whether a wallet is associated with fraud, theft, or sanctioned activity. Running an AML screen before you transact protects you from receiving tainted funds and from inadvertently sending money into an illicit network. What was once a tool only for institutions is increasingly available to ordinary users.

Check Wallet Risk Exposure

A wallet risk assessment evaluates a counterparty's transaction history for connections to high-risk sources. Blockchain intelligence platforms such as BitOK power many of these checks. A clean counterparty is a safer counterparty.

Avoid Unrealistic Investment Promises

Guaranteed returns, pressure to deposit quickly, and platforms you cannot independently verify are the hallmarks of investment fraud. No legitimate operation guarantees profits. If a stablecoin "investment" promises fixed high yields with no risk, treat it as a scam.

Use Regulated Platforms

Trade and store stablecoins on regulated, reputable exchanges that perform their own AML screening, sanctions checks, transaction monitoring, and fraud detection. Regulated platforms add friction for criminals and a layer of protection for you.

Is Stablecoin Safe for Everyday Payments?

For ordinary payments, is stablecoin safe? Largely yes — when you use a reputable stablecoin on a regulated platform and follow basic security practices. Millions of people use stablecoins daily without incident. The risk lies less in the technology than in counterparties, custody choices, and exposure to fraud. Is stablecoin safe in the abstract is the wrong question; how you use it determines your safety.

What Is the Safest Stablecoin?

What is the safest stablecoin is a question of backing, transparency, and oversight rather than brand. The safest stablecoin is generally one that is fully backed by high-quality liquid reserves, publishes regular and credible attestations of those reserves, operates under meaningful regulatory oversight, and maintains deep liquidity. No stablecoin is entirely risk-free, and the safest stablecoin for one user's needs may differ from another's.

USDT vs USDC Security Considerations

USDT and USDC are the two dominant fiat-backed stablecoins, and both are widely used and deeply liquid. They differ in their reserve composition, the frequency and detail of their disclosures, and their regulatory posture. Each carries trade-offs around transparency and accessibility.
Rather than declaring a winner, evaluate the reserve quality, disclosure practices, and regulatory standing of any stablecoin against your own priorities before relying on it.

AML Requirements

Regulators increasingly require platforms that handle stablecoins to implement anti-money-laundering programs: identity verification, transaction monitoring, and suspicious-activity reporting. These obligations are tightening the gaps criminals once exploited.

Sanctions Compliance

Sanctions screening is now central to stablecoin compliance. Platforms must check counterparties and transactions against sanctions lists and block prohibited activity. The use of stablecoins for sanctions evasion has made this a regulatory priority worldwide.

Stablecoin Regulation

Stablecoin regulation is moving from fragmented to comprehensive. New frameworks address reserve requirements, issuer licensing, redemption rights, and consumer protection. The direction is clear: stablecoins are being brought inside the regulated financial system rather than left outside it.

Future Compliance Trends

Expect deeper integration of transaction monitoring, wallet screening, and compliance obligations across the ecosystem. Blockchain intelligence platforms such as BitOK are increasingly embedded in how exchanges and financial institutions meet these requirements, screening flows and assessing wallet risk at scale. As compliance tightens, the practical anonymity criminals once relied on continues to erode.

Why do scammers ask for USDT?

Because USDT is the most widely available and liquid stablecoin in the world. Victims can easily obtain it, transfers are fast and irreversible, and scammers can cash it out almost anywhere — especially through peer-to-peer markets and on low-fee networks like Tron.

Are stablecoins traceable?

Yes. Major stablecoins run on public blockchains where every transaction is permanently recorded. Investigators and blockchain analytics platforms such as BitOK trace funds across wallets and exchanges, and pseudonymous wallets are routinely linked to real identities at regulated off-ramps.

Can stolen USDT be recovered?

Sometimes. Issuers can freeze tokens at flagged addresses, and investigators can trace stolen funds. But recovery is slow, crosses jurisdictions, and is not guaranteed. Criminals often cash out before funds can be frozen, which makes prevention far more reliable than recovery.

Is USDT safe?

USDT is widely used and deeply liquid, and for everyday use on regulated platforms it functions reliably. Its risks center on reserve transparency, regulatory developments, and counterparty exposure. Use it on reputable platforms, screen counterparties, and stay informed about the issuer's disclosures.

What are the biggest stablecoin risks?

The main stablecoin risks are fraud, receiving tainted funds from high-risk counterparties, depegging, regulatory changes, and custody failures on exchanges. Most of these stablecoin risks are manageable with AML screening, wallet risk assessment, and use of regulated platforms.

What is the safest stablecoin?

The safest stablecoin is generally one that is fully backed by high-quality liquid reserves, publishes credible attestations, operates under regulatory oversight, and maintains deep liquidity. No stablecoin is entirely risk-free, so match the choice to your own needs.

Are stablecoins legal?

In most jurisdictions, yes. Stablecoins are increasingly brought under formal regulation governing issuance, reserves, and compliance. Legality and the specific rules vary by country, and the regulatory landscape is changing quickly.

Why should users perform AML checks?

AML checks reveal whether a wallet or counterparty is linked to fraud, theft, or sanctioned activity. Screening before you transact protects you from irreversible losses, from receiving tainted funds that could freeze you out of regulated services, and from unknowingly aiding an illicit scheme.

Stablecoins became dominant in illicit crypto activity for the same reasons they became dominant everywhere else. They hold a steady value, move across borders in seconds, work in nearly every country, carry deep liquidity, and convert easily into cash.

By 2025 they carried roughly 85% of illicit transaction volume while Bitcoin fell to about 7% — not because Bitcoin grew safer, but because stablecoins are simply a better instrument for moving value, lawful or otherwise.

That dual nature is the core point. The properties that make stablecoins attractive to criminals are the same properties that make them genuinely useful to millions of legitimate users. A stablecoin is a payment rail, and payment rails are used by everyone.

The reassuring counterweight is transparency. Stablecoins are not anonymous. They live on public ledgers where transactions are permanent and traceable, and blockchain intelligence platforms such as BitOK help investigators, exchanges, and compliance teams follow the money and identify the people behind it. 
Transparency does not equal anonymity — the open ledger is one of the strongest tools against the very criminals who rely on these assets.

Stablecoins themselves are not criminal tools. They are neutral technology. The responsibility falls on users to evaluate their counterparties, assess transaction risk, and check wallet histories before sending funds. As transaction monitoring, wallet screening, and AML checks become standard practice, the space criminals once exploited keeps shrinking.