Thursday links: Crypto crime and agentic economies

Crypto crime had a banner year

Chainalysis estimates that illicit cryptocurrency addresses received $154 billion in 2025 — up 162% from the year before. 

How alarming that will sound to you depends on how much you care about US sanctions: Most of the increase is attributed to the rise of “large-scale nation-state activity.” Russia’s new ruble-backed A7A5 stablecoin, for example, facilitated more than $93.3 billion in transactions.

Sanctions evasion appears to contribute about $100 billion of the total (I’m eyeballing their infographic). I’d probably back that out, because sanctions evasion isn’t a crime from the perspective of the sanctions evader (one man’s sanctions evader is another’s freedom fighter).  

Even so, $54 billion is still a lot. “Even if the value received by sanctioned entities were flat YoY,” Chainalysis notes, “2025 would still mark a record year for crypto crime, as activity increased across most illicit categories.”

It’s also a lower-bound number that will be revised up as Chainalysis identifies additional addresses used in crime.

Chainalysis is careful to note that the illicit share of cryptocurrency transaction volume remains below 1% of the total; this compares favorably to traditional banking, where money laundering accounts for 2-5% of global GDP.

But this is apples-to-oranges.

Most cryptocurrency "transaction volume" is a function of trading. Annual trading volume in traditional finance amounts to quadrillions of dollars. So, traditional money laundering is only something like 0.00005% of the "transaction volume" number that crypto money laundering is compared to.

In the other direction, what’s the comparable economic activity in crypto? Perplexity generously guesstimates the total revenue generated in crypto-related activities for 2025 at $100 billion.

That’s not perfectly apples-to-apples with GDP, either, but if we use it as a rough proxy for the scale of the crypto economy, crypto’s illicit transactions (ex sanctions evasion) would amount to something like 54% of that figure.

Yikes.

Chainalysis also notes that its methodology excludes revenue from non-crypto-native crimes, such as traditional drug trafficking, where crypto is used only as a payment method — but payment is important! There’s no point committing a crime if you can’t get paid, so I’d probably include that, too.

I’m sure there’s a dozen other adjustments to be made in both directions, but however you slice it, the Chainalysis estimate is a big number — especially relative to the size of the crypto economy.

Cambodia Crime Incorporated

"Every few weeks, fireworks light up the night sky in Cambodia,” The New York Times reports, “set off by scammers to salute their biggest swindles." 

The Times investigation into the Huione Group serves as a vivid illustration of what Chainalysis calls the “professionalization” of crypto money laundering: “a full-stack criminal infrastructure” enabling ever-higher levels of fraud.

Cambodia’s dollarized economy, lax banking oversight, and corrupt government have made its capital, Phnom Penh, “home to a global clearinghouse for money launderers.”

The clearinghouse runs on stablecoins.

“Most transactions are conducted in the cryptocurrency Tether,” the Times writes. 

The process begins on Telegram, where scammers are matched (for a fee) with “mules” willing to offer the use of their KYC’d bank accounts (for another fee). 

Typically, the scammer instructs their victim to send money to the mule’s account. The mule then sends the money on to a bank in the Bahamas, which converts it to USDT on Binance. Finally, the USDT is cashed out at a casino in Cambodia or with a payments company like Huione.

It’s all very professional. “These days, scamming operations mimic professional institutions, employing thousands of people in marketing, sales and human resources departments.”

Huione even takes money in escrow and guarantees laundering transactions — a valuable service in a world where scammers get scammed, too.

(Truly, there is no honor among thieves.)

“Tether has frozen some of the group’s accounts at the behest of unspecified law enforcement officials and the messaging app Telegram has shut down some of its channels,” the Times writes. “But neither measure made a lasting effect.”

Cue the fireworks.

Will money exist in the agentic economy?

Researchers Rohit Krishnan and Alex Imas have run an experiment to determine if AI agents will need money to coordinate. 

Since money exists primarily to solve coordination problems caused by imperfect information — Adam Smith’s “coincidence of wants” — all-knowing AI agents should, in theory, be able to bypass the grubby institution of money and coordinate directly instead.

The results suggest that, in practice, agents will need money, too. 

The agents tried barter, central planning and IOUs, but despite knowing intellectually that establishing a numeraire was the optimal solution, they never actually did it. AIs seem to lack the instinct to transform credit into a shared medium of exchange.

“They don’t even come with the same set of ideas as this sea otter,” the authors note.

As a result, the artificially intelligent agents in the researchers’ experiment flailed around, unable to complete basic transactions or coordinate in meaningful ways. Even in simplified groups of just 8-12 agents, the number of successfully completed transactions drops to below 50%. “And this is the absolute simplest setting.”

I think my two Roombas might do better than that.

Cryptocurrency does not get a mention here, but it seems like the obvious solution. Not only because AI agents can’t easily open bank accounts, but because crypto excels at everything the researchers identify as necessary for “setting up institutions for the agents”: identity and roles, settlement and payment systems, pricing formats, reputation mechanisms, and marketplaces. 

Humanity has spent thousands of years evolving the societal infrastructure of money.

The crypto version might be our second greatest gift to AI (after all our Reddit posts they trained themselves on).

— Byron Gilliam

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