According to a new report from blockchain analytics firm Chainalysis, Chinese-language money laundering networks (CMLNs) have become the dominant infrastructure for laundering illicit cryptocurrency, now accounting for roughly 20% of all known illicit crypto money laundering activity globally. This represents a fundamental shift in the criminal landscape, with these networks processing a staggering $16.1 billion in 2025 alone, equivalent to about $44 million per day.
The report details a sharp expansion of the illicit on-chain money laundering ecosystem over the past five years, growing from $10 billion in 2020 to over $82 billion in 2025. This surge is attributed to the rising accessibility of crypto and a major change in laundering actors and methods. Inflows to identified CMLNs have grown at an alarming pace: 7,325 times faster than inflows to centralized exchanges, 1,810 times faster than DeFi protocols, and 2,190 times faster than intra-illicit on-chain transfers since 2020.
Chainalysis identified six distinct service types that form the CMLN ecosystem, operating through more than 1,799 active on-chain wallets. These include: running point brokers (initial entry channels), money mule motorcades (for layering), informal OTC services, Black U services (specializing in "tainted" crypto from hacks and scams), gambling services, and money movement services. Black U services showed the fastest growth, reaching $1 billion in cumulative inflows in just 236 days.
The financial flows through these networks closely mirror traditional money laundering phases—placement, layering, and integration—with on-chain data showing aggressive "smurfing" behavior. At the center of the ecosystem are guarantee platforms like Huione and Xinbi, which act as marketing and escrow hubs.
While regulatory responses are emerging, including designations by the U.S. Treasury's OFAC, FinCEN, and the UK's OFSI, experts warn that core networks persist and migrate when challenged. Tom Keatinge, Director at the Centre for Finance & Security at RUSI, attributed the networks' rapid, cross-border growth to Chinese capital controls, which create demand from wealthy individuals seeking to move money, providing liquidity for transnational crime.
The report underscores a significant capability gap, with criminals far outpacing law enforcement in crypto exploitation. Experts like Chris Urben of Nardello & Co. emphasize the need for a proactive, collaborative approach combining blockchain analysis, open-source intelligence, and human-source intelligence to disrupt the underlying networks rather than just the platforms they use.
