Illicit cryptocurrency transactions across major centralised exchanges have fallen to their lowest levels ever recorded in 2025, signalling a major shift for a sector once criticised for enabling financial crimes. Updated findings from Chainalysis and TRM Labs show a steep reduction in exposure to scam-related, hacked or sanctioned wallet addresses, a result of stronger global enforcement, tighter compliance systems and advanced monitoring technologies.
Major Exchanges See Sharp Declines in Illicit Volume
By June 2025, the seven biggest global exchanges recorded only 0.018% to 0.023% of total trading linked to illicit wallets, a drastic drop from figures tracked two years prior. Experts say the numbers reflect an industry-wide transition toward stricter oversight, improved transparency and closer collaboration with regulators and law-enforcement partners.
Binance posted the lowest exposure rate among major platforms. Chainalysis reported that just 0.007% of Binance’s trading activity in June 2025 came from illicit sources, more than 2.5 times lower than the industry average. TRM Labs’ independent assessment supported this, placing Binance’s “direct exposure” at 0.016%, compared to the 0.023% seen across rival exchanges.
Scale Makes Binance’s Progress Even More Noteworthy
With trading volumes equal to the combined activity of its next six largest competitors, Binance’s low exposure levels are especially significant. “Direct exposure” measures how much of an exchange’s volume interacts with wallets confirmed to be tied to fraud, hacks, sanctions evasion or other criminal activity.
Low percentages suggest suspicious transactions are being quickly flagged, blocked or escalated, limiting the spread of illicit funds across the crypto ecosystem.
Between January 2023 and June 2025, Binance reduced its illicit exposure by 96–98% while processing 217 million daily trades and more than $90 billion in volume, proving that high-scale operations can remain clean with the right systems in place.
Industry-Wide Improvements Driven by Stronger Compliance and Technology
The decline spans beyond Binance. Exchanges globally have tightened compliance frameworks, deployed more advanced tracking systems, and strengthened links with analytics companies and government agencies.
Binance alone employs 1,280+ compliance, risk and investigation specialists, making up 22% of its total workforce. It also uses AI-powered monitoring, responds to hundreds of thousands of law-enforcement requests annually, offers training for investigators, and participates in anti-money laundering initiatives such as the Beacon Network and T3+ programme.
These collective efforts highlight how structured compliance and global cooperation can dramatically reduce criminal exploitation of crypto platforms.
Crypto vs Traditional Finance: A Reality Check
The latest data also challenges claims that crypto is a primary tool for global financial crime. Research cited by NASDAQ, the UN and the IMF shows trillions of dollars in illicit funds pass through traditional banking each year, often via anonymous fiat transfers, shell companies and offshore networks.
In comparison, illicit activity now represents only a tiny fraction of total crypto volume, thanks to better oversight and clearer reporting standards.
A Shift in the Crypto Narrative
The significant drop in illicit flows suggests the long-standing portrayal of crypto as a haven for criminals is becoming outdated. Exchanges are evolving into highly monitored, regulated environments that offer safer and more transparent markets for users and businesses.
Maintaining Momentum in a Growing Industry
To preserve these gains, exchanges must continue investing in compliance technology, expanding cooperation with regulators, and committing to transparent reporting. The 2025 data demonstrates that with the right tools and industry coordination, crypto can achieve rapid growth without compromising integrity.
