A recent report by blockchain analytics firm Chainalysis indicates that over the past five years, an increasing amount of money involved in global cryptocurrency crime has been transferred and laundered through "Chinese-language money laundering networks." These underground money laundering organizations have not only expanded rapidly in scale but have also evolved from sporadic intermediaries into fully-fledged cross-border money laundering ecosystems, becoming a new focus of intense attention for international law enforcement and financial regulators.
Chinese-language money laundering networks have become the core of crypto-crime, accounting for 20% of illicit financial flows within five years.
According to Chainalysis statistics, over the past five years, approximately 20% of illicit cryptocurrency funds globally have been linked to money laundering networks operating within Chinese-speaking communities. This indicates that these networks are no longer merely peripheral players, but rather key nodes with substantial influence in international cryptocurrency financial flows.
Global money laundering is projected to exceed $82 billion by 2025, with Chinese-language money laundering networks accounting for $16.1 billion.
Chainalysis further points out that the global amount of money laundered through illicit cryptocurrency transactions exceeded $82 billion in 2025, setting a new record. Of this, approximately $16.1 billion was processed through Chinese-speaking money laundering networks. This can be seen from the following chart:
"Chinese-language money laundering networks have transformed from a peripheral player into a crucial link in the global blockchain-based illicit money laundering system, accounting for approximately 20% of the total, and have experienced explosive growth in the last two to three years."
The report also points out that these organizations have experienced explosive growth in recent years, rapidly expanding from a few active wallets to nearly 1,800 active wallets by 2025, forming a complete underground financial ecosystem with division of labor, channels, and service capabilities. Andrew Fierman, Director of National Security Intelligence at Chainalysis, described its growth rate as "more than 7,300 times faster" than other illicit financial flows.
Cryptocurrency bans leave gray areas, making stablecoins the best tool for money laundering.
Although the Chinese government has banned cryptocurrency trading, Chainalysis points out that actual enforcement mostly focuses on whether it impacts capital controls or financial stability, meaning that some crypto activities have not been completely eradicated and still have room to operate.
Kathryn Westmore, a senior fellow at the Centre for Finance and Security at the Royal United Services Institute (RUSI), pointed out that these money laundering networks are "highly embracing cryptocurrencies," particularly stablecoins like USDT, and also include mainstream crypto assets such as Bitcoin, as a primary channel for converting and concealing proceeds from cash-based crimes such as drug trafficking and fraud within on-chain cash flows. A Tether spokesperson did not immediately respond to inquiries.
The United States has also issued a warning, and international organizations have cautioned about the risks associated with stablecoins and non-custodial wallets.
In 2024, the U.S. Treasury Department issued a warning to the banking system, stating that Chinese-language money laundering networks were helping Mexican drug cartels conceal the proceeds of crime. According to statistics from the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN), between 2020 and 2024, the amount of related transactions reached approximately $312 billion, and these networks were also used to help individuals circumvent China's foreign exchange and capital controls.
Chainalysis also cited Chris Urben, managing director of risk consultancy Nardello & Co., who pointed out that cryptocurrencies have gradually replaced traditional underground money exchanges, providing a faster, more covert, and more efficient way to move funds across borders. The Financial Action Task Force (FATF) warned in June that as the use of stablecoins in "non-custodial wallets" increases, criminals can more easily evade regulation, and most illicit activities on the crypto ledger are now related to stablecoins.
This article, Chainalysis: Chinese Crypto Money Laundering Networks Continue to Expand, Handling Approximately $16.1 Billion in Illicit Funds, first appeared on ABMedia .
