The Shift in Crypto Money Laundering: A New Frontier
The landscape of cryptocurrency-based money laundering is undergoing a dramatic shift. According to a recent report by Chainalysis, informal Chinese-language networks have become a key player in facilitating the movement and disguise of illicit funds. These unconventional ecosystems now dominate a significant portion of global crypto laundering activities.
How Do These Networks Operate?
Operating primarily through Chinese-speaking online channels, these networks function as ‘laundering-as-a-service’ providers. Key components of their operations include:
- Money Mules: Individuals who transfer assets across borders to avoid detection.
- Informal Over-the-Counter (OTC) Desks: Platforms that bypass traditional banking compliance processes.
- Gambling Platforms: Channels used to mix and redirect cryptocurrency, obfuscating transaction trails.
These sophisticated techniques allow criminals to layer and move funds with minimal regulatory oversight, reflecting a major evolution in illegal financial operations.
Why Centralised Crypto Exchanges Are Losing Appeal
Centralised crypto exchanges have heightened compliance measures globally, improving transaction monitoring, user verification, and cooperation with regulatory authorities. As a result, the risks of funds being frozen or flagged have increased significantly, making these platforms less attractive for illegal activities.
However, informal networks provide flexibility and continue to gain traction by bypassing such controls. The Chainalysis report revealed that the inflows to these networks grew 7,325 times faster than those seen on centralised exchanges since 2020.
Alarming Growth: $16.1 Billion Laundered in 2025
Chinese-language money laundering networks processed an astounding $16.1 billion in illicit crypto funds in 2025, equating to $44 million daily. This accounts for roughly 20% of all tracked illicit crypto activities globally. Additionally, the broader crypto-laundering ecosystem reached an unprecedented $82 billion in total illicit funds, underscoring the scale and efficiency of these decentralised systems.
The Need for Adaptive Strategies
Tackling these sophisticated networks demands more than traditional enforcement. Law enforcement agencies face a widening gap in technical capabilities compared to the criminals they pursue. Chainalysis emphasized the need for:
- Better information sharing across international borders.
- Targeting laundering operators, specialized vendors, and advertising channels.
- Enhanced focus on blockchain tracing to outpace evolving methods of criminal activity.
A combined global effort involving governments, blockchain analytics firms, and crypto platforms is essential to mitigate the escalating threat posed by service-driven laundering networks.
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