Cryptocurrency has revolutionized the financial world, but it has also attracted illicit activities. Among them, Chinese-language money laundering networks have emerged as dominant players. In 2025, these networks processed $16.1 billion in illicit funds, representing 20% of known crypto laundering activity worldwide. Here’s what you need to know about their rapid growth and complex operations.
Explosive Growth Outpaces Traditional Methods
Since 2020, Chinese cryptocurrency laundering networks have grown at a staggering rate, outpacing centralized exchanges by 7,325 times. Even decentralized finance (DeFi) platforms, known for their flexibility, grew 1,810 times slower. The scale of these networks explains their appeal to transnational organized crime groups in Europe and North America.
Compared to $10 billion in 2020, the overall illicit crypto laundering landscape expanded to $82 billion in 2025. These networks became the go-to solution as centralized exchanges tightened regulations, offering efficient laundering services to criminals worldwide.
The Role of Capital Controls
Capital controls in China have unintentionally fueled this network growth. Wealthy individuals looking to discreetly transfer money out of China turned to these services, inadvertently creating liquidity that organized crime exploits. These networks rely on advanced systems and automated processes to move massive sums quickly and discreetly, bypassing traditional manual methods.
Six Service Types Drive the Infrastructure
The foundation of these operations is built on a sophisticated infrastructure comprising six main service types:
- Running Point Brokers: Recruit individuals to set up bank accounts and digital wallets for laundering initiation.
- Money Mule Operations: These involve multiple accounts and complex layering schemes to disguise fund origins.
- Over-the-Counter (OTC) Desks: Circumvent existing regulatory controls by offering unverified, high-value transactions.
- Black U Services: Handle cryptocurrency from scams and hacks, offering illicit assets at discounted rates.
- Mixing and Swapping Services: Provide anonymity by blending and exchanging crypto funds across platforms.
- Gambling Platforms: Used to hide and move funds through unregulated betting systems.
Challenges for Law Enforcement
Authorities worldwide are struggling to keep up with these fast-evolving systems. Recent enforcement actions have targeted entities such as the Prince Group and Huione Group, identified as key players in these laundering operations. Despite some disruptions, vendors often migrate to alternative platforms, evading lasting operational interruptions.
Tom Keatinge, Director of the Centre for Finance & Security at RUSI, highlights the gap between criminal capabilities and law enforcement. Poor information sharing and fragmented national laws make tackling these networks an uphill battle. Experts suggest combining blockchain analysis with robust investigative strategies to improve detection and mitigation efforts.
Keeping Your Crypto Secure
As the crypto landscape evolves, it’s essential to ensure your funds remain secure. One product that helps protect assets is the Ledger Nano X, a secure hardware wallet designed for digital currencies. This tool can help you secure your crypto holdings and ensure they remain out of reach of malicious actors.
Conclusion
Chinese-language money laundering networks represent a significant challenge to global financial security. Their growth underscores the need for better regulations and advanced detection techniques in the cryptocurrency space. Staying informed and securing your assets are vital as these networks continue to adapt and innovate.
