Blockchain intelligence firm TRM Labs warns that crypto‐enabled fraud and illicit flows increased in 2025, with an estimated $35 billion in crypto moving into scam schemes globally and over $100 million tied to fraud affecting just New Yorkers
According to the 2026 TRM labs reports released on March 4, these mentioned figures probably understate the true scale of losses, “When underreporting is factored in, total annual losses likely exceed USD 200 billion worldwide.
While, Global Head of Policy at TRM Labs, Ari Redbord said, “Where we work with local, state and federal law enforcement, regulators, financial institutions, and national security agencies in New York and around the globe to detect, investigate, and disrupt illicit activity in the digital asset ecosystem and beyond.”
The report points out how advanced crypto crime networks are, as they increasingly use social engineering and AI techniques to target victims, also that scam funds are frequently transferred across several crypto wallets and chains in a matter of 24 to 48 hours, making recovery exceedingly challenging.
Monitoring Illicit Crypto Activity
Crypto scams can happen across countries, but New York City police action begins where the victim reports it. They bring various proofs such as transaction copy, screenshots, chat messages, QR codes and other.
According to the report, tracking the flow of stolen money requires the use of certain digital identifiers, such as wallet addresses, transaction hashes, and domain names. If these critical identifiers are not accurately recorded, if investigators are not trained to recognize, the likelihood of stopping the fraud decreases
Equipping Law Enforcement
The report suggests, “We must accelerate education and place advanced investigative tools in the hands of our frontline officers and prosecutors at the same pace that bad actors are scaling their operations. As criminal networks grow faster and more technologically sophisticated, our training, capabilities, and deployment of resources must move just as quickly — if not faster.”
Additionally, Blockchain and AI tools are necessary for the NYPD and district attorney offices to track cross-chain activity, identify wallets, facilitators, and laundering networks, and trace stolen cryptocurrency. Without these tools, law enforcement only sees part of the bigger picture in crypto crime.
Also, the report mentioned, The RIP OFF Act (Restoring Integrity and Preventing Outright Fraud in Financial Systems Act), which is a New York State law that modernizes fraud statutes to reflect how large‐scale, organized fraud schemes operate. It also explicitly covers virtual currencies and strengthens rules against hiding or evading reporting requirements.
