Chinese Networks Dominate Illicit Crypto Flows

Chinese laundering networks process $16.1B in crypto, dominating 20% of global illicit flows in 2025.

Key Points:

Chinese networks process $16.1B in illicit crypto flows.
Control 20% of global crypto laundering.
Adopt fast-growing Telegram networks for anonymity.

Chinese-language money laundering networks managed $16.1 billion in illicit cryptocurrency across over 1,799 active wallets in 2025, as reported in the Chainalysis 2026 Crypto Crime Report.

The rise of these networks indicates a significant shift in global crypto crime, highlighting gaps in regulatory measures and increasing the complexity of enforcement.

Chinese Networks Dominate Illicit Crypto Flows

Chainalysis’ 2026 Crypto Crime Report reveals Chinese-language laundering networks processed $16.1 billion in illicit cryptocurrency in 2025. They now comprise approximately 20% of global on-chain laundering activity, utilizing over 1,799 active wallets to manage finances. The criminal activity in the cryptocurrency sector is elaborately detailed in a recent report.

No specific leaders in these networks have been identified, but operations are decentralized, featuring six service types. Various services include money mules and gambling platforms. These networks quickly evolved from reliance on traditional banking systems.

The emergence of these networks impacts the market by diverting flows from centralized exchanges, relying on Telegram for transactions. They handle funds linked to scams and state-sponsored activities, including those connected to North Korean campaigns. The FinCEN and OFAC are concentrating on such networks as primary money laundering concerns.

The networks are financially significant, with an average of $44 million laundered daily in 2025. As a broader implication, they channel a considerable share of scam proceeds, indicating a shift in crypto laundering methods post-pandemic.

The rapid adoption of Telegram-based networks since 2020 reflects shifts in methods and regulatory challenges. Tom Keatinge, Director, Centre for Finance & Security at RUSI, said, “Very rapidly, these networks have developed into multi-billion-dollar cross-border operations offering efficient, value-for-money laundering services that suit the needs of transnational organized crime groups across Europe and North America.” FinCEN and OFAC target disrupting operations by sanctioning associated groups.

Experts suggest that these laundering networks may evolve further, influencing global financial norms. The focus is needed on combining open source and human intelligence for detection, as traditional security measures remain insufficient against decentralized laundering tactics.