Chinese-Language Networks Now Responsible for 20% of Cryptocurrency Money Laundering
January 27, 2026 — By Oihyun Kim
A new report released by blockchain analytics firm Chainalysis reveals a striking shift in the global cryptocurrency money laundering landscape. Chinese-language money laundering networks (CMLNs) are now the largest drivers of illicit crypto fund flows, accounting for approximately 20% of all known crypto money laundering activity worldwide in 2025. ### $16.1 Billion Processed in 2025, Rapid Growth Outpaces Exchanges
The 2026 Crypto Crime Report by Chainalysis highlights that CMLNs processed an astonishing $16.1 billion in illicit funds last year, averaging around $44 million daily through more than 1,799 active wallets. Remarkably, since 2020, the inflows to these Chinese-language networks have surged at an exponential rate – growing 7,325 times faster than inflows to centralized exchanges, 1,810 times faster than decentralized finance (DeFi) platforms, and 2,190 times faster than other illicit on-chain activities.
This rapid expansion underscores a fundamental shift in how criminal proceeds are moved globally, presenting unique challenges for law enforcement and national security agencies worldwide.
Six Key Service Types Powering the CMLN Ecosystem
Chainalysis identified six distinct service types within the CMLN ecosystem, each playing a critical role in the laundering process:
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Running Point Brokers: These actors serve as the initial entry points for illicit funds. They recruit individuals to provide bank accounts, crypto wallets, or exchange deposit addresses to receive and forward fraudulent proceeds.
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Money Mule Motorcades: Responsible for the layering stage of laundering, these networks use multiple accounts and wallets to obscure the funds’ origins. Some vendors have expanded operations across five African countries, illustrating the system’s global reach.
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Informal OTC Services: Offering “clean funds” or “White U” without Know Your Customer (KYC) checks, these services facilitate fund transfers but remain tightly linked to illicit platforms like Huione.
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Black U Services: Specializing in “tainted” cryptocurrencies derived from hacks, exploits, and scams, these services sell such funds at significant discounts (10-20% below market value). Black U services demonstrated the fastest growth, hitting $1 billion in inflows in just 236 days. In late 2025, large transactions processed by these services cleared in as little as 1.6 minutes on average.
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Gambling Services: Some Telegram-based gambling vendors use rigged games to launder large volumes of cash through frequent and high-volume transactions.
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Money Movement Services: Providing mixing and swapping functionality, these services help obscure fund origins and are actively used by illicit actors across Southeast Asia, China, and North Korea.
Laundering Techniques Mirror Traditional Patterns
On-chain data analysis revealed that CMLNs mimic traditional money laundering stages—placement, layering, and integration. For example, Black U services aggressively “structure” transactions through “smurfing,” with small transfers under $100 increasing by 467% from inflow to outflow, and very large transfers (over $10,000) reaching 51% more destination wallets than sources. Meanwhile, running point brokers, gambling insiders, and OTC services act as aggregators, pooling illicit funds for eventual clean reintroduction into legitimate financial systems.
Guarantee Platforms: Central Hubs but Not Controllers
Platforms such as Huione and Xinbi serve as guarantee platforms within the ecosystem, acting as marketing venues and escrow services for money laundering vendors. However, these platforms do not directly control laundering activities. Chainalysis observed that even after enforcement actions and platform removal (e.g., Telegram’s action to remove Huione accounts), vendors rapidly migrate to alternatives. This migration highlights the necessity of targeting individual operators rather than focusing solely on platforms.
Regulatory and Enforcement Responses
Recent enforcement efforts include designations by the US Treasury’s Office of Foreign Assets Control (OFAC) and the UK’s Office of Financial Sanctions Implementation (OFSI) against groups like the Prince Group. The US Financial Crimes Enforcement Network (FinCEN) has issued a Final Rule naming Huione Group as a primary money laundering concern and released advisories specifically addressing Chinese money laundering networks.
While disruptive, these actions have not dismantled core laundering networks, which continue to evolve and shift across platforms.
Expert Insights on the Rapid Expansion
Tom Keatinge, Director of the Centre for Finance & Security at RUSI, attributes the explosive growth of these laundering networks to Chinese capital controls. Wealthy individuals seeking to circumvent these controls provide the liquidity necessary to facilitate transnational organized crime activities across Europe and North America.
Chris Urben, Managing Director at Nardello & Co, notes a significant shift from traditional informal value transfer systems to cryptocurrency, emphasizing crypto’s efficiency in moving funds across borders with minimal KYC requirements. Digital assets allow the movement of billions stored securely in cold wallets, facilitating large-scale laundering operations.
The Need for Enhanced Public-Private Collaboration
Chainalysis stresses that combating crypto-integrated laundering networks requires a strategic pivot from reactive enforcement against isolated platforms to proactive disruption of the entire laundering networks’ infrastructure.
Urben highlights the importance of integrating open-source intelligence, human-source intelligence, and sophisticated blockchain analytics. “Effective detection comes when these methods interconnect to trace both players and currency flows, enabling a comprehensive mapping of laundering networks,” he explained.
As Chinese-language crypto money laundering networks continue to expand, the report underscores the pressing need for coordinated global efforts that combine regulation, enforcement, technological innovation, and collaboration between public and private sectors to stem the tide of illicit finance in the digital age.
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