Stablecoins have become one of the most significant developments in cryptocurrency — and one of the most challenging for anti-money laundering compliance. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins are designed to maintain a fixed value, typically pegged to a fiat currency like the US dollar. This price stability makes them ideal for legitimate commerce — but also makes them attractive vehicles for money laundering.

Southeast Asia has become a target for transnational criminal organizations seeking to exploit the region’s growing digital economy for stablecoin-related money laundering. A January 2024 UNODC report highlighted how criminal networks — often with links to organized crime groups outside the region — have used USDT on the Tron blockchain to move illicit funds across borders.

Cambodia has responded proactively to this threat. The National Bank of Cambodia introduced a comprehensive regulatory framework for virtual assets in late 2024, while CAFIU has strengthened oversight and cooperation with international enforcement agencies. Cambodia ranked 17th globally in cryptocurrency adoption in 2024, reflecting significant legitimate use that the regulatory framework aims to protect.

For compliance teams and reporting entities operating in Cambodia — whether banks, fintech companies, or virtual asset service providers — understanding how stablecoins are exploited by transnational criminals is essential to protecting customers, meeting obligations under Cambodia’s AML law, and supporting the integrity of the financial system.

What Are Stablecoins and Why Do They Matter for AML?

Stablecoins are a category of cryptocurrency designed to maintain a stable value relative to a reference asset. The most common types include:

As of early 2026, the total market capitalization of stablecoins exceeds $305 billion, with Tether (USDT) alone accounting for over $185 billion (approximately 61% market share) and Circle’s USDC comprising another $74 billion (DefiLlama Stablecoins Data ). Transaction volumes reached $33 trillion in 2025 — a 72% increase from the prior year. This scale — combined with the ability to move value across borders in minutes without traditional banking intermediaries — creates significant money laundering risks.

Stablecoins in Money Laundering

Stablecoins offer several characteristics that make them particularly useful for money laundering compared to traditional cryptocurrencies or fiat currency:

1. Price Stability

Bitcoin’s volatility means that criminals converting illicit proceeds to BTC risk significant value loss. A drug trafficker holding $1 million in Bitcoin could see that value drop 20% overnight. Stablecoins eliminate this risk — $1 million in USDT today will still be worth approximately $1 million next month.

2. High Liquidity

Major stablecoins like USDT and USDC are accepted on virtually every cryptocurrency exchange worldwide. This creates a global liquidity network where illicit funds can be converted, moved, and cashed out across multiple jurisdictions.

3. Instant Cross-Border Settlement

Traditional wire transfers involve correspondent banking relationships, SWIFT messaging, and settlement delays. Stablecoin transfers settle on-chain in minutes, regardless of the origin or destination country. This speed allows criminals to move funds across borders before authorities can intervene.

4. Layering Through DeFi Protocols

Decentralized finance (DeFi) protocols allow stablecoins to be swapped, lent, borrowed, and pooled without centralized intermediaries. A criminal can:

1. Convert dirty fiat to USDT through a complicit exchange
2. Bridge USDT across multiple blockchains (Ethereum, Tron, Solana)
3. Swap through decentralized exchanges (DEXs) to break the transaction trail
4. Provide liquidity to DeFi protocols to generate seemingly legitimate yield
5. Withdraw “clean” funds that appear to be investment returns

5. Tron Network Dominance

The Tron blockchain accounts for over 55% of all USDT transaction volume, holding more than $82 billion in USDT tokens (CoinDesk ). The network’s lower transaction fees compared to Ethereum make it attractive for high-volume transfers — but also for illicit activity. According to TRM Labs’ 2024 analysis , Tron hosted $26 billion in illicit transaction volume in 2024 — representing 58% of all illicit crypto activity, compared to 24% on Ethereum and 12% on Bitcoin. A UNODC report titled “Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia” identified USDT on Tron as “a preferred choice” for fraudsters and money launderers, citing its speed, low transaction fees, and ease of use. In response, Tether, Tron, and TRM Labs established the T3 Financial Crime Unit , which has frozen over $300 million in suspected criminal assets since its launch in August 2024.

International Enforcement and Regional Cooperation

Transnational criminal organizations have exploited Southeast Asia’s rapid digital growth, with stablecoins becoming a key tool for moving illicit funds. Cambodia has emerged as an active partner in international enforcement efforts to combat these networks.

Coordinated Enforcement Actions

In October 2025, the U.S. Treasury Department and U.K. authorities announced the largest joint enforcement action ever targeting cybercriminal networks operating in Southeast Asia. The action targeted a transnational criminal organization with operations across multiple countries, resulting in the sanctioning of 146 entities and individuals and the seizure of approximately $14.4 billion in Bitcoin — the largest forfeiture in U.S. DOJ history.

In May 2025, the U.S. Financial Crimes Enforcement Network (FinCEN) designated Huione Group as a “primary money laundering concern” under Section 311 of the USA PATRIOT Act. According to FinCEN, this entity — part of a broader transnational network — laundered at least $4 billion in illicit proceeds between 2021 and 2025, including funds from North Korean cyber heists and investment fraud schemes.

Common Typologies

Compliance teams should be familiar with these documented typologies:

Regulatory Landscape for Stablecoins

Regulators globally are rapidly expanding AML requirements for stablecoin issuers and virtual asset service providers (VASPs):

Financial Action Task Force (FATF)

FATF’s updated guidance on virtual assets classifies stablecoins as virtual assets subject to Recommendation 15. This means:

• Stablecoin issuers may be classified as VASPs with full AML/CFT obligations
• The Travel Rule applies to stablecoin transfers above applicable thresholds
• Countries must ensure VASPs are licensed or registered and supervised for AML/CFT

United States

The U.S. has taken enforcement action against stablecoin-related money laundering through:

• FinCEN treating stablecoin issuers as money services businesses (MSBs)
• OFAC sanctioning Tornado Cash mixer and designating specific stablecoin wallet addresses
• DOJ prosecuting individuals for laundering funds through stablecoins

European Union

The EU’s Markets in Crypto-Assets (MiCA) regulation and updated AML package create comprehensive requirements for stablecoin issuers operating in Europe, including:

• Licensing requirements for asset-referenced token issuers
• Full AML/CFT obligations aligned with traditional financial institutions
• Transaction monitoring and suspicious activity reporting requirements

Cambodia’s Regulatory Framework

Cambodia has developed a forward-looking regulatory framework for virtual assets that balances innovation with prudential controls. The National Bank of Cambodia’s Prakas B7-024-735 , issued in December 2024, establishes clear rules for cryptoasset service providers (CASPs):

• Risk-based asset classification: Cryptoassets are divided into Group 1a (tokenized securities), Group 1b (stablecoins), and Group 2 (unbacked cryptocurrencies such as Bitcoin)
• Prudential limits: Commercial bank exposure to Group 1a is capped at 5% of Common Equity Tier 1 (CET1) Capital, while Group 1b (stablecoins) exposure is limited to 3% of CET1 Capital
• Group 2 restrictions: Commercial banks are prohibited from proprietary trading in Group 2 cryptoassets; customer-facing services for Group 2 require separate regulatory approval
• Licensing requirement: Commercial banks, payment institutions, and other legal entities must obtain prior NBC approval or a license to provide cryptoasset services

Reporting entities operating in the cryptoasset space remain subject to Cambodia’s Law on Anti-Money Laundering and Combating the Financing of Terrorism, including customer due diligence, transaction monitoring, and suspicious transaction reporting to CAFIU.

This framework positions Cambodia among the countries taking a structured, risk-based approach to virtual asset regulation — protecting consumers and the financial system while allowing for responsible innovation.

Red Flags for Stablecoin Transactions

Stablecoins present distinct money laundering risks compared to volatile cryptocurrencies. Compliance teams with blockchain analytics capabilities should watch for these indicators:

Network and Infrastructure Indicators:

• High transaction volumes on the Tron network — over 58% of illicit crypto activity in 2024 occurred on Tron due to low fees and speed
• Connections to wallets flagged by blockchain analytics or associated with FinCEN-designated entities

How KMaker Supports Cryptocurrency AML Compliance

For reporting entities in Cambodia operating under the NBC and CAFIU framework, KMaker’s platform provides the tools needed to detect stablecoin-related money laundering and fulfill regulatory obligations:

• Stablecoin Monitoring (Coming Soon) — Purpose-built detection for stablecoin-specific money laundering patterns, including value preservation behaviors, Tron network activity analysis, and integration with blockchain analytics to identify connections to high-risk wallets.
• AML Transaction Monitoring — Configurable rules and machine learning models designed to detect cryptocurrency-related red flags in transaction flows, including patterns associated with investment fraud cashouts and unlicensed exchange activity.
• Watchlists & PEPs Screening — Real-time screening against global sanctions lists including OFAC-designated cryptocurrency addresses, FinCEN advisories, and international risk databases to ensure compliance with Cambodia’s AML law.
• Decision & Scoring Engine — Dynamic risk scoring that incorporates counterparty risk indicators, transaction behavior patterns, and risk factors to prioritize alerts and support STR filings to CAFIU.

As Cambodia strengthens its position as a well-regulated jurisdiction for digital finance, robust AML controls are essential for reporting entities to demonstrate compliance, maintain correspondent banking relationships, and contribute to the integrity of the national financial system.

Understanding how stablecoins are exploited by transnational criminals is the foundation. Building systems that can detect, prevent, and report suspicious activity supports Cambodia’s broader efforts to combat financial crime and protect its growing digital economy.