Crypto Emerges as Key Tool in China’s Money Laundering Networks: Report
China’s long-running marketing campaign to limit capital flight is being undercut by its personal legal networks, which have more and more turned to Bitcoin and different digital belongings to maneuver cash throughout borders, in line with new analysis.
Key Takeaways:
- Chinese cash laundering networks are more and more utilizing Bitcoin and USDT to bypass strict capital controls.
- The identical networks now serve Western legal teams, together with the fentanyl provide chain.
- Researchers warn that crypto-enabled laundering has turn out to be so globalized that no single jurisdiction can deal with the issue alone.
A paper published this month by Kathryn Westmore, a senior analysis fellow on the Centre for Finance and Security on the Royal United Services Institute, argues that cryptocurrencies have turn out to be a central pillar of China’s underground monetary system.
Chinese Laundering Networks Turn to Crypto to Evade Capital Controls
Westmore stated Chinese Money Laundering Organisations (CMLOs) are actually routinely utilizing digital belongings as conduits for illicit money.
“Increasingly, [CMLOs] are incorporating cryptocurrencies inside their operations, offering criminals with digital belongings, such as Bitcoin, or stablecoins, such as Tether USDT, in return for his or her soiled money,” she wrote.
These digital belongings then serve as a software for people to quietly shift wealth offshore, bypassing strict capital controls that restrict the motion of funds in another country.
The shift comes amid a broader surge in crypto-related crime. Investor losses surpassed $2.3 billion in 2025, whereas pig-butchering scams drained $4 billion from victims in 2024, in line with Chainalysis.
Westmore’s analysis provides one other dimension to that panorama, displaying that Chinese laundering teams have additionally turn out to be essential monetary intermediaries for Western legal operations, together with the fentanyl provide chain.
The report describes how drug proceeds collected in the United States are transformed into Bitcoin or USDT, then routed to offshore accounts belonging to rich Chinese shoppers searching for discreet channels to maneuver funds overseas.
The use of crypto extends past laundering providers. Many Chinese sellers of fentanyl precursor chemical substances now settle for Bitcoin and USDT immediately, successfully turning digital belongings into settlement infrastructure for the artificial opioid commerce.
Blockchain analytics agency Elliptic has corroborated these claims, documenting onchain funds to China-based chemical suppliers tied to international fentanyl distribution networks.
With crypto rails woven deeply into these transnational laundering programs, Westmore warns that the issue is simply too huge for any single authorities to deal with.
Europol Busts Ring Behind 49 Million Fake Accounts Tied to Crypto
In October, Europol dismantled a sophisticated cybercrime syndicate accused of making greater than 49 million faux on-line accounts, together with fraudulent profiles linked to main cryptocurrency platforms.
The operation, codenamed “SIMCARTEL,” uncovered a classy SIM farm-for-hire community that offered non permanent cellular numbers used to bypass two-factor authentication, permitting criminals to mass-produce faux identities and commit large-scale monetary fraud.
According to Europol, the syndicate’s infrastructure supported account creation for a variety of on-line providers, from e-commerce websites to digital banks and crypto exchanges.
These faux accounts have been then used to launder illicit funds, run phishing campaigns, and facilitate smishing scams focusing on European customers.
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