Chinese Laundering Networks Now Dominate Crypto Crime, Processing $44M Daily as Enforcement Struggles to Keep Pace

Chinese-language money laundering networks (CLMNs) have emerged as the dominant infrastructure for global crypto laundering, processing an estimated $16.1 billion in 2025 across more than 1,799 active wallets, according to new data released in Chainalysis' 2026 Crypto Crime Report.

The blockchain intelligence firm's analysis reveals these networks now handle approximately 20% of all known illicit crypto laundering activity globally, marking a fundamental shift away from traditional centralized exchanges toward decentralized, Telegram-based operations that have proven resilient to enforcement actions.

The growth has been explosive. Since 2020, inflows to identified Chinese-language money laundering networks grew 7,325 times faster than those to centralized exchanges, 1,810 times faster than those to decentralized finance, and 2,190 times faster than intra-illicit on-chain flows, according to the report published Tuesday.

Six service types, industrial-scale operations

Chainalysis has identified six distinct service types operating within the CMLN ecosystem: running point brokers, money mules, over-the-counter services, "Black U" services, gambling platforms, and money movement services.

Black U services, which specialize in laundering cryptocurrency from hacking campaigns, exploit attacks, and scams, reached $1 billion in processing volume in just 236 days, the fastest time-to-scale among all service types tracked.

Black U services processed very large transactions in an average of just 1.6 minutes in Q4 2025, faster than many legitimate payment systems.

Capital controls created the infrastructure

Experts interviewed for the report point to Chinese capital controls as the foundational driver behind these networks' rapid expansion.

"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," Tom Keatinge, director at the Centre for Finance & Security at RUSI, told Chainalysis.

"Wealthy individuals seeking to move money out of China and evade these controls provide the impetus and liquidity pool needed to service organized crime groups based in the West," Keatinge explained.

Chris Urben, managing director at Nardello & Co, told Chainalysis that "the biggest change in Chinese money laundering networks in recent years is a rapid transition to crypto from reliance on informal value transfer systems" like traditional underground banking methods.

Platform disruptions prove insufficient

The report highlights a critical challenge for law enforcement: disrupting platforms where these services advertise has proven insufficient to halt operations.

While Huione's guarantee operations were disrupted after Telegram removed some of their accounts, vendors using Huione continued to use or advertise on alternative platforms with their operations uninterrupted, according to Chainalysis.

Guarantee platforms like Huione and Xinbi function primarily as marketing venues and escrow services for money laundering vendors, but don't control the underlying laundering activity and therefore aren't included in Chainalysis' total metric.

"While these major facilitators have rightfully been attracting more attention in recent months," the report states, effective disruption requires "targeting the illicit operators and vendors themselves, in addition to their advertising venues."

Global reach expanding beyond Asia

The networks' geographic footprint extends well beyond China and East Asia. Chainalysis analyzed Telegram posts where certain vendors claim to coordinate "fleets" across Africa, suggesting expanding operations across multiple continents.

The report identifies several behavioral patterns that distinguish different service types. While Black U services and gambling platforms fragment large transactions into small amounts to evade detection, OTC services consolidate small transactions into large amounts for integration into legitimate financial systems.

Law enforcement faces capability gap

The scale of these operations presents significant challenges for authorities worldwide. Keatinge noted that "there is a chasm in most countries between the capabilities of criminals and law enforcement when it comes to crypto use".

The report emphasizes that addressing crypto-integrated laundering networks demands coordinated public-private partnerships. Urben stressed that "to detect these money laundering networks, you need to rely on open source and human source intelligence combined with blockchain analysis".

The broader context reveals an illicit on-chain money laundering ecosystem that has grown dramatically, increasing from $10 billion in 2020 to over $82 billion in 2025.

Recent enforcement actions, including FinCEN's designation of Huione Group as a primary money laundering concern and Treasury's OFAC sanctions against the Prince Group, have drawn attention to the national security implications of these networks, which process funds from activities ranging from pig-butchering scams to North Korean state-sponsored hacking campaigns.