Chinese Language Money Laundering Networks Emerge as Major Facilitators of the Illicit Crypto Economy, Now Driving 20% of Laundering Activity

TL;DR

• After rising at the begin of the pandemic, Chinese-language cash laundering networks (CMLNs) now dominate identified crypto cash laundering exercise, processing an estimated 20% of illicit crypto funds over the previous 5 years. This development is 7,325 occasions quicker than development of illicit inflows to centralized exchanges since 2020.
• CMLNs processed $16.1 billion in 2025 — roughly $44 million per day throughout 1,799+ lively wallets.
• Chainalysis has recognized on-chain behavioral fingerprints of six distinct service sorts inside the CMLN ecosystem. Black U and playing companies fragment giant transactions into small quantities to evade detection, whereas over-the-counter (OTC) companies consolidate small transactions into giant quantities for integration.
• Guarantee platforms like Huione and Xinbi serve as aggregation factors for cash laundering distributors, however don’t management underlying exercise, and due to this fact should not included in our complete metric. Enforcement actions have confirmed disruptive, however distributors merely migrate to different channels, highlighting the want to focus on laundering operators themselves.

The illicit on-chain money laundering ecosystem has grown dramatically in recent times, growing from $10 billion in 2020 to over $82 billion in 2025. [1] This substantial topline development displays the rising accessibility and liquidity of cryptocurrencies, as effectively as a elementary shift in how this laundering exercise happens and by whom.

As proven in the chart under, Chinese-language cash laundering networks (CMLNs) have elevated their share of identified illicit laundering exercise to roughly 20% in 2025. This regional connection is additional evidenced by the off-ramping patterns we observe. To take one instance, as we highlighted in the scams chapter of this report, CLMNs have grown to now persistently launder over 10% of funds stolen in pig butchering scams, coinciding with a gradual decline in the use of centralized exchanges, probably as a result of exchanges can freeze funds.

Compared to different laundering endpoints, since 2020, inflows to recognized CMLNs grew 7,325 occasions quicker than these to centralized exchanges, 1,810 occasions quicker than these to decentralized finance (DeFi), and a pair of,190 occasions quicker than intra-illicit on-chain flows. While CMLNs are not at all the solely facilitator of on-chain laundering, Chinese-language Telegram-based companies now account for a disproportionate share of the attributed world on-chain cash laundering panorama. In doing so, they course of funds from a variety of on- and off-chain felony exercise.

Recent enforcement actions towards cash laundering facilitation networks, together with sanctions designations and advisories, have shined a light-weight on the nationwide safety risk impacting victims worldwide. These actions embody the designation of the Prince Group by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and the Office of Financial Sanctions Implementation (OFSI) by HM Treasury in the UK, the Financial Crimes Enforcement Network (FinCEN)’s Final Rule designating Huione Group as a major cash laundering concern, and  FinCEN’s advisory on Chinese money laundering networks.

While these main facilitators have rightfully been attracting extra attention in latest months, this chapter for the first time takes a deeper have a look at how these in depth underground laundering networks use cryptocurrency and analyzes the scale of these ecosystems. These cash laundering networks function brazenly throughout varied platforms and exhibit advanced, multi-layered operations characterised by industrial-scale processing capability, operational resilience, and technical sophistication.

The $16.1 billion scope and scale of CMLNs

We have recognized six discrete service sorts that make up the CMLN ecosystem, which we are going to study in the sections forward. Together, these companies processed $16.1 billion in inflows in 2025. The quantity of lively entities that comprise these networks has risen from a small handful just a few years in the past to over 1,799 lively on-chain wallets in 2025.

The velocity to scale of these operations is equally regarding. The time it takes for every service sort to course of $1 billion since the first identified deal with of its class receives funds reveals each a remarkably speedy time-to-scale and putting variations between service sorts. Black U companies reached this milestone in simply 236 days, whereas operating level brokers required 843 days and OTC companies 1,136 days. Money mules (1,277 days) and cash motion companies (1,790 days) function extra slowly, whereas playing insider companies have but to achieve the billion-dollar threshold. Overall, the CMLN ecosystem in 2025 is processing nearly $44 million per day.

These networks’ speedy time-to-scale suggests they’re tightly interwoven with off-chain felony networks, as development of this magnitude can be laborious to realize with out vital capital swimming pools put into play. It additionally reveals a classy on-chain and off-chain operational infrastructure. At the heart of this ecosystem sit assure platforms — centralized marketplaces which have develop into the anchor for CMLN operations.

As Tom Keatinge, Director at Centre for Finance & Security (CFS) at RUSI, informed us, “Very quickly, these networks have developed into multi-billion greenback cross-border operations providing environment friendly, value-for-money laundering companies that swimsuit the wants of transnational organized crime teams throughout Europe and North America. As to why these networks have developed so quick, the brief reply is that they’re an unexpected consequence of the imposition of capital controls in China. Wealthy people looking for to maneuver cash out of China and evade these controls present the impetus and liquidity pool wanted to service organized crime teams primarily based in the West. The skilled enablers of this capital flight present the companies essential to match these two impartial but mutually useful wants.”

Similarly, Chris Urben, Managing Director at Nardello & Co defined to us that “the largest change in Chinese cash laundering networks in recent times is a speedy transition to crypto from reliance on casual worth switch methods like the conventional Black Market Peso or Fei Qian approaches to underground banking. Crypto affords an environment friendly approach to discreetly transfer funds throughout borders with out having to depend on the advanced guide community of casual ledgers in varied nations that was once the norm.”

Guarantee platforms: the anchor of the CMLN ecosystem

Guarantee companies perform primarily as advertising venues and escrow infrastructure for CMLNs. While they supply belief mechanisms for distributors, they don’t management the underlying laundering exercise and aren’t included in our complete metric. Huione and Xinbi have dominated the marketplace for the previous few years, and plenty of different assure companies proceed to function freely.

While Huione’s assure operations had been disrupted after Telegram removed some of their accounts, distributors utilizing Huione have continued to make use of or promote on different platforms, their operations uninterrupted. While these hubs proceed to attach distributors and consumers, most distributors promote commercials throughout platforms and should not reliant on any particular service. As with legit e-commerce platforms, service scores and opinions create accountability inside the illicit ecosystem, and distributors usually domesticate their market fame by way of public attestations of their reliability and repair high quality, as proven in the screenshot under.

 

CMLNs promoting on these assure companies provide a variety of cash laundering strategies with the major purpose of integrating illicit funds into the legit monetary system. Some leverage huge networks of cash mules for entry to mainstream crypto alternate laundering, whereas others function their very own on-chain laundering infrastructure. These laundering methodologies characterize distinct approaches to reaching the identical purpose: cleansing soiled cash.  

The six CMLN typologies

CMLNs provide all kinds of laundering-as-a-service companies. Our evaluation of Chinese-language vendor posts reveals that these companies deploy six major cash motion strategies: operating level brokers, cash mules, OTCs, Black U companies, playing platforms, and cash motion companies that supply mixing and swapping of crypto property.  These operations contain 1000’s of distributors processing tens of billions of {dollars}. Understanding how these entities function and type a complete laundering community offers essential insights into potential disruption alternatives. Below, we study these service classes intimately.

1. Running level brokers: the preliminary entry channel

In the cash laundering course of, “operating factors” (跑分) serve as the important entry channel for illicit fund transfers. Individuals are recruited, usually by way of vendor commercials, to lease out their monetary identities, offering financial institution accounts, digital wallets, or deposit addresses at mainstream exchanges to obtain and ahead fraudulent proceeds.

Advertisements explicitly warn contributors that they bear all authorized penalties and financial losses when authorities intervene, leaving little question that the exercise is illicit.

Originally concentrated in on-line playing operations, operating factors’ companies have expanded to facilitate the full spectrum of illicit actions that leverage crypto for laundering, together with romance scams, alternate heists, and Telegram-based human trafficking operations. This broad adoption displays their elementary utility: they supply the essential bridge between legit monetary methods and the felony underground.

As illustrated in the Chainalysis Reactor graph under, operating level brokers perform as routing mechanisms for varied illicit sources, finally sending funds to accounts — seemingly beneath a mule’s title — at mainstream exchanges. Notable locations embody different laundering companies, mainstream exchanges to transform to fiat, and platforms related to the Huione Group ecosystem.

2. Money mule motorcades: the laundering intermediaries

While “operating factors” serve as entry factors to exchanges, cash mules, or “motorcades,” (车队) orchestrate the advanced layering section of cash laundering. These specialised operators type networks of accounts and wallets to obscure fund origins by way of a number of transactions.

Money mule operations use a quantity of strategies to transform between fiat and crypto, and vice-versa.This consists of offline companies the place sellers meet clients in particular person; ATM money withdrawals transformed to crypto; digital pockets transfers by way of third-party fee platforms, and card-based schemes utilizing bank cards and present playing cards in alternate for crypto. Vendors brazenly promote accepted monetary establishments, crypto exchanges, and fee strategies, though the precise preparations with card retailers and intermediaries happen privately exterior public Telegram channels.

Although we’re unable to determine the nationality of the cash mule motorcades primarily based on Telegram posts alone, these posts are nearly solely in Mandarin and sometimes allude to financial institution accounts and areas in Mainland China, suggesting these cash laundering distributors are seemingly primarily serving Chinese-speaking clientele. Recent research from the Royal United Service Institute (RUSI) has pointed to the rising involvement of Chinese organized crime. These networks, as effectively as legitimate crypto use, have continued to thrive in spite of China’s sweeping crypto ban. Chinese authorities have centered on selective crackdowns and AML enforcement – tacitly permitting or ignoring some varieties of crypto exercise whereas aggressively concentrating on something that threatens the nation’s capital controls or monetary stability.

Beyond home operations, these networks readily provide specialised companies for cross-border funds transfers by way of world fee strategies and foreign exchange. Vendor operations boast their vital geographical attain. In Telegram posts, sure distributors declare to have the ability to coordinate “fleets” (seemingly referring to collections of motorcades and cash mules) throughout Africa, suggesting the world attain of CMLN operations is rising effectively past China and East Asia. “CMLOs rightly view crypto as having much less Know Your Customer compliance than conventional banks and crypto transactions, which lower the threat and enhance the velocity of the laundering course of,” notes Urben. “Finally, crypto makes it far simpler to bodily transfer giant holdings throughout borders: you may carry billions of BTC in a chilly pockets saved on a tough drive stuffed into your pocket.”

 

A recurring theme throughout commercials providing cash motion companies is the pronounced emphasis on urgency, discretion, and velocity. Vendors usually stress the must switch funds quickly to forestall fund freezes, whereas providing cursory steerage to their clients on navigating issues arising from funds and accounts which have already been restricted by monetary establishments and crypto exchanges.

Within assure platforms, the motion of funds orchestrated by operating level brokers and cash mules represent a big portion of the marketed choices. The putting similarities in how commercials are worded and structured counsel that these operators seemingly perform both inside bigger umbrella organizations or keep strategic collaborative relationships with each other. Collectively, these cash motion companies type the spine of the cash laundering infrastructure inside the underground banking ecosystem.

The United Nations Office on Drugs and Crime (UNODC) offers the most apt description of this relationship: motorcades perform as extensions of operating level syndicates, providing refined layering schemes by routing illicit funds by way of a number of financial institution accounts in alternate for a reduce of the complete transferred funds. The UNODC’s 2024 report on casinos, cash laundering, and transnational organized crime in East and Southeast Asia additionally highlights the use of third-party and fourth-party fee suppliers. These networks usually point out high ranges of connectivity, suggesting layers of fee companies could also be working as fronts by the identical teams to facilitate laundering.

3. Informal over-the-counter (OTC) and peer-to-peer (P2P) companies: Circumventing controls

Informal OTC commerce desks provide one other important laundering pathway. Unlike their legit counterparts, these companies function with out regulatory oversight or jurisdictional affiliation and intentionally circumvent capital controls required in extremely managed markets, such as China. By processing fund transfers with out Know Your Customer (KYC) verification, they current a beautiful possibility for customers looking for to maneuver property, particularly these of suspicious origins.

Many OTC distributors explicitly promote “clear funds” or “White U.” Exchange charges displayed transparently in vendor posts usually exceed market charges, reflecting the premium charged for regulatory evasion. These companies course of each home and cross-border transfers, increasing the geographic attain of illicit fund flows.

However, on-chain evaluation contradicts “clear fund” claims. These supposedly legit OTC companies keep in depth connections with Huione and different assure platforms, revealing their deep integration inside the broader CMLN ecosystem. The identical distributors promoting “White U” usually work together with confirmed cash laundering companies, demonstrating that casual OTC desks can perform as important bridges for illicit cryptocurrency.

4. Black U companies: Discounted charges for tainted property

Operating primarily exterior assure platforms, “Black U” companies occupy a singular area of interest in the CMLN ecosystem, and are the inverse of the casual “White U” OTCs. These distributors specialise in cryptocurrency derived from illicit sources, such as hacking campaigns, exploit assaults, scams, and pockets theft — and brazenly state this of their commercials. Their enterprise mannequin entails promoting illicit cryptocurrency at a reduced fee .

Buyers buy illicitly sourced funds, generally 10-20% decrease than customary charges in alternate for accepting property with felony provenance. This compensates consumers for assuming potential authorized publicity and the threat of fund seizure.

The operational construction of Black U companies reveals refined coordination. Across completely different distributors, the front-end web sites of Black U companies usually show almost similar layouts with solely superficial variations in domains and branding. Telegram channels exhibit the identical sample. These infrastructural commonalities level to 2 potentialities: both these seemingly impartial operations perform as compartmentalized items inside a single group, or they characterize a coordinated community sustaining operational consistency.

5. Gambling companies: Traditional laundering goes digital

While not inherently illicit in lots of jurisdictions, playing companies have been used for each conventional and crypto-based laundering as a consequence of their high money volumes, frequent transactions, and built-in mechanisms for changing funds. Both casinos and on-line betting platforms provide customers an efficient approach to place, layer, and combine proceeds into the legit monetary system, particularly as a result of they supply believable explanations for sudden wealth.

Many of these playing companies settle for crypto and don’t require KYC particulars. Third-party fee suppliers facilitate account top-ups utilizing each fiat and crypto, with some processors dealing with recharges throughout a number of playing websites, permitting for cross-platform fund motion. Additionally, some Telegram distributors provide insider ideas suggesting predicted or rigged outcomes, with commercials guaranteeing compensation if clients’ “profitable numbers” should not chosen. This additional means that some playing companies should not only a conduit for laundering, however taking an lively position in facilitating fastened outcomes.

 

The Reactor graph under illustrates how playing companies can be utilized by insiders, the place the insider extracts the fastened consequence proceeds from the playing platform, then continues the laundering course of by sending onward by way of extra cash laundering companies, such as Black U companies and cash mules. On-chain exercise signifies the playing insider operators ship funds again into the playing platforms as effectively.

6. Money motion companies: mixing and swapping-as-a-service

Fund mixing to obfuscate transaction origins is well-established in refined cyber heists. Professional mixing companies, together with Tornado Cash and Blender.io, earned worldwide notoriety after they had been sanctioned by the US authorities for his or her position in laundering stolen funds, with Tornado Cash later being de-listed by OFAC.

Within Southeast Asia’s underground banking ecosystem, specialised distributors throughout assure service platforms provide swapping-as-a-service to allow purchasers to transform their crypto into a number of property. These swap companies have discovered regional footing, particularly amongst illicit actors lively in Southeast Asia, China, and even North Korea, offering a laundering mechanism for these looking for to maintain funds on-chain.

On-chain information reveals CMLN monetary flows resemble conventional cash laundering phases

Analysis of transaction flows by way of CMLN companies exposes industrial-scale deployment of conventional cash laundering methodologies. The following chart tracks how completely different companies fragment and consolidate illicit funds, revealing clear patterns of “structuring” (smurfing) and “aggregation” as funds transfer by way of the laundering cycle.

This quantitative framework may help establish companies and their roles inside the broader cash laundering ecosystem, probably even when an entity’s true working mechanism shouldn’t be but identified.

Black U companies epitomize aggressive structuring conduct, with small (<$100) and medium ($100-$1000) transactions growing by 467% and 180% respectively from influx to outflow. These companies additionally persistently fragment funds throughout extra wallets, with very giant transfers (>$10K) reaching 51% extra vacation spot wallets than supply wallets. Money mules and cash motion companies, to a lesser however nonetheless vital diploma, act likewise. In these instances, the shift towards smaller transactions and extra counterparties represents textbook smurfing: breaking down giant felony proceeds to evade detection thresholds.

Gambling insiders, operating level brokers, and OTC companies function as the ecosystem’s major aggregators. For these companies, incoming transfers throughout nearly all denominations exceed outgoing transactions, suggesting these companies pool funds from a number of factors and ship them out in bulk batches to fewer counterparty wallets on-chain. For the OTC companies specifically, this consolidation sample displays their position in the integration section — accumulating quite a few small deposits into wholesale quantities appropriate for reintroduction into legit monetary methods.

CMLNs prioritize VIP clients; most illicit funds are moved in minutes

The velocity at which funds transfer by way of the completely different laundering companies additionally reveal distinct patterns. In the charts under, we see that regardless of the laundering typology, high worth transfers are prioritized. However, the companies that construct automated laundering mechanisms are likely to develop into extra environment friendly throughout any switch worth quantity with time. Those that depend on guide mechanisms nonetheless are likely to prioritize greater worth transfers, however are much less environment friendly at transferring smaller transfers.

Black U companies present the highest effectivity with regards to processing funds, with very giant transactions cleared on common in 1.6 minutes in This fall 2025. The operational crucial to maneuver illicit funds quickly is probably going a significant contributing issue shaping the technical infrastructure of Black U companies. In a number of of these companies, self-service swapping mechanisms are additionally obtainable. Customers merely present their desired alternate quantity and vacation spot deal with, and the system executes the swap routinely. This automation serves a twin objective: accelerating the laundering course of whereas minimizing operational overhead and decreasing the digital footprint that guide processing creates.

Similarly, playing operations use built-in fee options to course of substantial each day transaction volumes. These automated methods allow these platforms to deal with large-scale monetary flows effectively, with funds deposited and cleared quickly.

In distinction, cash mules and operating factors exhibit far much less consistency in transaction clearing patterns. These networks stay predominantly guide, requiring recruited people to actively course of transactions in real-time utilizing their private financial institution accounts or digital wallets. This human ingredient introduces variability into the laundering course of, creating timing variations  that differ from the constant processing signatures of automated companies.

 

Combating crypto-integrated laundering networks by way of public-private collaboration

Chinese-language assure platforms, cash motion companies, and related monetary crime networks reveal a fancy and resilient ecosystem that continues to adapt regardless of enforcement efforts. As with different genres of illicit on-chain exercise, actions towards assure companies could be disruptive, however the core networks persist and migrate to different channels when challenged.

The scale and integration of these operations current vital challenges for monetary crime compliance, intelligence, and legislation enforcement efforts. Effective disruption requires concentrating on the illicit operators and distributors themselves, along with their promoting venues. These networks type the important infrastructure enabling the conversion of illicit proceeds from fraud, scams, and different felony actions into seemingly legit property at scale.

More importantly, whereas CMLNs play an outsized position in crypto-enabled cash laundering, they don’t seem to be the solely laundering networks to have tailored technologically. In December 2024, the United Kingdom’s National Crime Agency (NCA) disrupted a multi-billion dollar Russian-language money laundering network which supplied companies to a variety of illicit actors, together with Russian and worldwide elites, cybercriminals, and drug gangs. As Keatinge famous, “There is a chasm in most nations between the capabilities of criminals and legislation enforcement with regards to crypto use. A mix of nationally-based legal guidelines, limitations created by borders, poor data sharing, and restricted crypto tracing and asset restoration capabilities imply that crypto affords criminals a low threat/high reward methodology of benefiting from their criminality. Whilst blockchain tracing firms have supplied welcome help in some instances, this capability constructing is simply the tip of the iceberg. A systemic world effort to upskill the crypto capabilities of legislation enforcement round the world and create higher data sharing mechanisms is urgently wanted.”

Addressing the problem of crypto-integrated laundering networks calls for coordinated public-private partnership and a paradigm shift from reactive enforcement towards particular person platforms towards proactive disruption of underlying networks. Urben emphasised that “the handiest investigative technique is to match your investigative instruments towards the operational method of the CMLOs. To detect these cash laundering networks, you want to depend on open supply and human supply intelligence mixed with blockchain evaluation. Only when these instruments work collectively, and develop leads that feed into one another, will you have the ability to match the gamers to the foreign money actions and map the networks.”

By combining legislation enforcement’s authorized authorities with the personal sector’s technical capabilities and blockchain analytics experience, the business can extra successfully establish and dismantle these companies working throughout a number of platforms, jurisdictions, and communication channels. On-chain transparency offers unprecedented visibility into these operations — when paired with cross-platform intelligence sharing and coordinated enforcement actions, these instruments allow stakeholders to extend the price and threat of working large-scale cash laundering companies. Future intervention methods should prioritize this collaborative method to realize significant, lasting disruption of crypto-integrated laundering networks, together with CMLN operations.

[1] This is a decrease sure estimate primarily based on CMLN actions; it solely displays companies attributed by Chainalysis and doesn’t embody Guarantee Services.

 

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