Chainalysis pointed out that in recent years, networks operating primarily in Chinese-language channels have emerged as a major player in the shadowy world of cryptocurrency-based money laundering. Chainalysis also explained that these groups, often referred to as Chinese-language money laundering networks (CMLNs), now account for approximately one-fifth of all tracked illicit crypto transactions over the last half-decade.
According to insights from Chainalysis, this dominance reflects a dramatic expansion, with funds flowing into these operations growing at rates far outpacing other sectors: over 7,000 times faster than centralized exchanges, nearly 2,000 times quicker than decentralized finance platforms, and more than 2,000 times swifter than direct illicit transfers on the blockchain since 2020.
By 2025, these networks managed $16.1 billion in assets, averaging around $44 million per day across roughly 1,800 active digital wallets.
This surge mirrors the broader growth in underground crypto laundering, which ballooned from $10 billion in 2020 to more than $82 billion last year, fueled by easier access to digital currencies and the sophistication of specialized services.
At the core of CMLN operations are six core service models, uncovered through detailed blockchain scrutiny.
Entry-level facilitators, known as running point brokers, lease out bank accounts or exchange credentials to initially receive and reroute proceeds from crimes like fraud and cyber thefts.
Layering experts, dubbed money mules or “motorcades,” create intricate webs of accounts to muddle transaction trails, employing tactics such as cash machine conversions, intermediary payments, and credit card maneuvers.
These services cater mainly to Chinese-speaking users but extend globally, even into regions like Africa.
Other components include unregulated over-the-counter (OTC) trading desks that enable anonymous transfers, often linking to larger illicit systems despite assertions of legitimacy.
“Black U” operations specialize in trading tainted cryptocurrencies at reduced prices, breaking down bulky sums into tiny, hard-to-trace fragments.
Gambling platforms serve as laundering conduits by allowing high-stakes bets on rigged digital games, blending dirty money through rapid turnover.
Finally, money movement specialists offer blending and conversion tools to erase origins, supporting criminals across Southeast Asia and elsewhere.
These networks scale with remarkable speed; for instance, Black U services hit $1 billion in volume in under eight months, far quicker than OTC alternatives, which took over three years.
High-priority funds move swiftly, with automated setups clearing massive deals in minutes, while hands-on mule processes vary more.
Blockchain footprints show tactics like “smurfing” in Black U—splitting funds into numerous small moves—and consolidation in OTC to reintegrate cleaned assets.
The consequences are profound, enabling a spectrum of offenses, including handling over 10% of proceeds from elaborate investment scams known as “pig butchering.”
Such activities pose risks to international security by funneling illegal gains into mainstream economies.
While crackdowns—like US sanctions on entities such as the Prince Group, financial regulations targeting the Huione Group, and British warnings—have hampered some players, these adaptable networks pivot to new channels, often via apps like Telegram, sustaining their multi-tiered resilience.
Experts from Chainalysis highlight that intermediary “guarantee” sites, like Huione and Xinbi, act as vendor directories without direct involvement in laundering, excluding them from the $16.1 billion tally.
To combat this, strategies focus on pinpointing and disrupting core operators using unique on-chain signatures.
Enhanced cooperation between governments, private firms, and intelligence sources is crucial, leveraging blockchain tools alongside public data to unravel these webs.
Moving beyond reactive measures to preemptive infrastructure takedowns, as demonstrated in dismantling similar language-specific rings, could significantly curb this threat.