The Underground Empire: How Chinese Money Laundering Networks Moved $16 Billion Through Crypto in 2025
The Staggering Scale of Digital Money Laundering
The world of cryptocurrency has long promised financial freedom and decentralization, but in 2025, it also became the backbone of one of the largest underground economies on the planet. According to comprehensive research from Chainalysis, a leading blockchain analytics firm, Chinese-language money laundering networks moved an astonishing $16.1 billion in illegal funds through cryptocurrency transactions throughout the year. To put this into perspective, this represents nearly one-fifth—roughly 20%—of the entire global illicit crypto economy, which Chainalysis valued at over $82 billion for the year. These aren’t small-time operations run by a handful of tech-savvy criminals working from basement apartments. Instead, we’re looking at sophisticated, well-funded organizations with international reach, industrial-scale operations, and an alarming ability to adapt to law enforcement efforts. The sheer volume of illegal money flowing through these channels—approximately $44 million per day—reveals an underground financial system operating in parallel to legitimate markets, serving everyone from organized crime syndicates to state-sponsored actors looking to evade international sanctions.
Telegram: The Unlikely Marketplace for Criminal Finance
At the heart of these money laundering operations lies an unexpected platform: Telegram, the encrypted messaging app that millions use for everyday communication. Chinese-language money laundering networks, known as CMLNs, have transformed specific Telegram channels into thriving marketplaces for illicit financial services. These channels function as informal escrow systems where money launderers openly advertise their services, often posting photographs of stacks of cash alongside glowing testimonials from satisfied “customers.” It’s a surreal digital bazaar where criminal services are marketed with the same enthusiasm and customer-focused approach as legitimate businesses might sell consumer products. These Telegram guarantee platforms do more than just facilitate money laundering—they’ve become multi-purpose criminal marketplaces. The same channels that help criminals clean dirty money also host advertisements for human trafficking operations and facilitate the sale of Starlink satellite dishes to scam centers operating throughout Southeast Asia. The platforms work by connecting vendors offering laundering services with customers who need to disguise the origins of their illegal funds, creating a criminal ecosystem with built-in reputation systems and dispute resolution mechanisms that mirror legitimate e-commerce platforms in disturbing ways.
The Methods Behind the Madness: How Digital Laundering Works
The Chainalysis report identified six distinct techniques these networks employ to launder money, with a heavy emphasis on stablecoins—cryptocurrencies designed to maintain a stable value by being pegged to traditional currencies like the US dollar. Stablecoins such as USDT (Tether) and USDC (USD Coin) have become the preferred tools for these criminal enterprises, and the reasons are straightforward. As Andrew Fierman, Head of National Security Intelligence at Chainalysis, explained to CNBC, criminals gravitate toward stablecoins because they offer three critical advantages: high liquidity (the ability to quickly convert large amounts without significantly affecting price), strong anonymity (the ability to move funds without easily revealing identities), and low volatility (maintaining value without the dramatic price swings associated with Bitcoin or other cryptocurrencies). This combination makes stablecoins ideal for criminals who need to move large sums quickly while preserving value and minimizing the risk of detection. Beyond digital methods, these networks also employ traditional money laundering techniques with a modern twist. Many groups channel funds through casinos, particularly those operating in Southeast Asia, where they can inflate revenue figures to disguise criminal proceeds as legitimate gambling winnings. A 2024 United Nations report specifically highlighted Southeast Asia’s emergence as a major hub for both licensed and unlicensed casinos with ties to organized crime, creating a perfect environment where digital and physical laundering methods intersect.
The Global Players and Geopolitical Dimensions
The scope and clientele of these Chinese-language money laundering networks extend far beyond traditional organized crime. Andrew Fierman revealed that the networks serve an alarming range of clients, including sanctioned state actors who use these channels to circumvent international financial restrictions. “We’ve seen everything from North Korean money and DPRK-related hacks moving through these channels to a wide range of other illicit activity,” Fierman told CNBC, highlighting how these networks have become essential financial infrastructure for nations cut off from the legitimate international banking system. The involvement of North Korean state actors is particularly concerning from a national security perspective, as it suggests that these laundering networks are helping to finance one of the world’s most isolated and unpredictable regimes, potentially funding weapons programs and other activities that threaten regional and global stability. While the networks communicate primarily in Mandarin Chinese, the geographic reality is more complex. Many of the actual transactions and operations originate not in mainland China but in Cambodia and Myanmar, where criminal syndicates run elaborate scam centers that target victims worldwide. These Southeast Asian operations have become infamous for large-scale fraud operations, often involving victims who are themselves trafficked and forced to participate in the scams under threat of violence.
The Challenge of Law Enforcement in a Borderless Digital World
Efforts to combat these networks face significant challenges rooted in both technology and geopolitics. China itself banned cryptocurrency trading in 2021 and has aggressively pursued scam operations, recently making headlines when state media reported that 11 members of a Myanmar-based syndicate were executed on charges including homicide, fraud, and illegal casino operations. However, the harsh penalties in China have simply pushed many operations across borders into Southeast Asian countries where weaker legal frameworks and endemic corruption create safe havens for criminal enterprises. Mark Button, a criminology professor at the University of Portsmouth, emphasized the sophistication of these operations in his assessment: “These are very large, well-resourced organizations. This is not like a few criminals operating out of a back room flat.” His observation underscores a critical point that law enforcement agencies worldwide must grapple with—these aren’t opportunistic criminals but well-funded, professionally managed organizations with resources that rival legitimate businesses, allowing them to hire technical talent, maintain complex infrastructure, and adapt rapidly to law enforcement pressure.
An Evolving Threat With No Easy Solutions
Perhaps the most troubling aspect of this underground economy is its remarkable adaptability and resilience. Despite increased scrutiny from blockchain analytics firms, international law enforcement cooperation, and harsh penalties in some jurisdictions, these networks continue to thrive and evolve. Andrew Fierman’s warning captures the frustrating reality facing authorities: “This is how illicit actors operate. They evolve, and once one gets detected, they hop to another avenue.” This cat-and-mouse dynamic means that even successful enforcement actions often produce only temporary disruptions rather than lasting solutions. The $16.1 billion that flowed through these networks in 2025 represents not just a snapshot of current criminal activity but a glimpse into the future of financial crime—increasingly digital, borderless, and difficult to combat with traditional law enforcement approaches. As cryptocurrency adoption continues to grow worldwide and new technologies emerge, these networks will likely continue to evolve, finding new platforms, new methods, and new jurisdictions where they can operate with relative impunity. The challenge for the international community is developing collaborative, technologically sophisticated responses that can keep pace with criminal innovation while preserving the legitimate benefits that cryptocurrency and digital finance can offer to law-abiding users worldwide.
