Crypto Launderers Are Ditching Exchanges, While Chinese Networks Are Filling the Gap

Jimmy Aki
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On January 27, research and analytics company, Chainalysis, disclosed in a report that crypto-based money launderers have been stepping away from centralized exchanges. Instead, these companies are now choosing to work with Chinese language-enabled money laundering networks.

New Report Reveals a Strategic Shift Away From Centralized Exchanges

The report details a clear strategic shift. Last year, Chinese laundering networks processed $16.1 billion in illicit crypto transactions. Daily volumes averaged $44 million across roughly 1,800 active wallets.

Over the past five years, these networks handled about 20% of all illegal crypto funds. Their growth in facilitating illicit transactions was dramatically faster than centralized exchanges, at least 7,300 times faster. Compared to decentralized exchanges, the growth was about 2,100 times faster.

According to Chainalysis, these firms thrive on privacy and speed. Many of them operate across privacy-focused platforms like Signal and Telegram, consolidating funds from both on- and off-chain criminal activity. As such, they are liquid enough to move funds quickly without being detected.

The primary component of Chinese-enabled money laundering networks is Guarantee-platforms like Xinbi and Huione.

Chainalysis stated that these platforms offer users the necessary infrastructure to access services like trust mechanisms and escrow accounts. As such, while they don’t necessarily participate in any illegal activity, these Guarantee-platforms maintain the look of legitimacy while covering up the money laundering activities that they support.

This will be a sharp contrast from centralized exchanges, which impose several anti-money laundering (AML) and know-your-customer (KYC) checks to prevent and track fraudulent activity. These exchanges are also under strict AML requirements by governments, which include data sharing.

Money Laundering Networks Upscaling Amid AML Enforcement

Looking forward, it is expected that these money laundering networks will capture even more of the crypto-enabled criminal scene. These platforms are scaling very quickly, with Chainalysis noting that several of them were able to process $1 billion in transactions in less than four years.

Another major catalyst for their growth will be the rapid expansion of the underground crypto-enabled money laundering scheme.

A separate Chainalysis report earlier this year revealed that $154 billion flowed into illegal crypto wallets in 2025, a 162% increase from the previous year.

In the report, Chainalysis noted that many of these inflows came from state-controlled assets, with countries like North Korea using crypto to move illicit funds gotten from their hacking and money laundering operations.

At the same time, countries under heavy sanctions have relied more on crypto in their bid to circumvent these restrictions and move money worldwide.

With this trend only expected to grow in 2026, Chinese money laundering networks are expected to grow in popularity and utility.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.