Binance Research Finds Illicit Crypto Activity Constrained by Blockchain Traceability

Illicit crypto activity has been a long-standing concern for the cryptocurrency industry, but recent research suggests that it is becoming increasingly difficult for bad actors to launder their funds.

A report by Binance Research found that illicit activity accounts for less than 1% of total on-chain transaction volume. This may seem like a small percentage, but it still translates to significant amounts of money, with over $75 billion in illicit funds remaining visible on blockchains as of 2025.

The report attributes this trend to the increasing use of blockchain traceability and limitations in mixer capacities. While crypto mixers can help obscure the origin of illicit funds, they have limited capacity and cannot handle large sums of money quickly enough. This makes it difficult for bad actors to complete a clean exit from the crypto ecosystem.

The persistence of blockchain traceability is also a significant factor in hindering laundering efforts. More than 80% of illicit funds on-chain are moved to downstream wallets, but each transfer remains recorded on the ledger, allowing investigators and analytics firms to follow the movement of funds.