At a Glance
- Illicit on-chain laundering grew from $10 billion in 2020 to over $82 billion in 2025.
- Chinese-language money laundering networks (CMLNs) now account for roughly 20 % of known illicit activity.
- CMLNs processed $16.1 billion in 2025 inflows and grew 7,325 × faster than centralized exchanges.
- Why it matters: The shift to Telegram-based Chinese services shows how quickly criminals adapt and highlights gaps in law-enforcement tracing.
The world of crypto-based money laundering has exploded in the last five years. According to blockchain analytics firm Chainalysis, illicit on-chain flows have risen from $10 billion in 2020 to more than $82 billion in 2025. This surge is tied to greater cryptocurrency accessibility, liquidity, and a change in how laundering is carried out.
Growth of Illicit Crypto Laundering
The five-year jump represents a seven-fold increase in illicit activity. Chainalysis notes that the rise is largely driven by new laundering techniques and actors that bypass traditional financial controls.
The Rise of Chinese-Language Money Laundering Networks
CMLNs have become a dominant force in the ecosystem. In 2025 they account for roughly 20 % of all known illicit laundering activity. They also consistently launder more than 10 % of funds stolen through pig-butchering scams.
A key trend is the decline in the use of centralized exchanges for laundering. These platforms are more likely to freeze illicit funds, pushing criminals toward more covert channels.
Speed and Scale
Since 2020, inflows to identified CMLNs have exploded at a pace far outstripping other laundering endpoints:
- 7,325 × faster than centralized exchanges
- 1,810 × faster than decentralized finance (DeFi) protocols
- 2,190 × faster than intra-illicit on-chain transfers
Chainalysis identified six distinct service types that together processed $16.1 billion in inflows in 2025. The number of active entities within these networks grew rapidly, rising from a small group a few years ago to 1,799 active on-chain wallets in 2025.
Processing Time and Traditional Laundering Phases
The time required for each service type to move $1 billion from the first known address highlights both rapid growth and major differences across services. On-chain transaction data shows that flows through CMLNs mirror the classic smurfing and aggregation phases seen in traditional money-laundering operations.
Russian-Language Laundering Network
While CMLNs dominate the crypto-laundering landscape, other networks remain active. In December 2024, the United Kingdom’s National Crime Agency dismantled a multi-billion-dollar Russian-language laundering operation that catered to cybercriminals, drug gangs, and both Russian and international elites.
Tom Keatinge, Director at the Centre for Finance & Security (CFS) at RUSI, commented:
> “There is a chasm in most countries between the capabilities of criminals and law enforcement when it comes to crypto use. A combination of nationally-based laws, barriers created by borders, poor information sharing, and limited crypto tracing and asset recovery capabilities means that crypto offers criminals a low risk/high reward method of benefiting from their criminality.”
Implications for Law Enforcement and the Crypto Ecosystem
The shift from centralized exchanges to Telegram-based Chinese services illustrates how quickly criminals adapt to regulatory pressures. The sheer volume of CMLN inflows and the speed at which they move money underscore the challenges faced by regulators and investigators.
Key points for stakeholders:
- Centralized exchanges remain a primary target for freezes but are increasingly bypassed.
- Telegram-based services provide anonymity and rapid transfer capabilities.
- Law-enforcement must improve cross-border information sharing and tracing tools.
Key Takeaways
- Illicit on-chain laundering has surged from $10 billion to $82 billion between 2020 and 2025.
- Chinese-language networks now handle 20 % of all illicit laundering activity.
- These networks process $16.1 billion in 2025 inflows and grow 7,325 × faster than centralized exchanges.
- The dismantling of a major Russian-language operation in 2024 highlights that multiple linguistic networks are active.
- Rapid adaptation and the use of messaging platforms pose significant challenges for law-enforcement agencies.
Understanding these trends is essential for anyone involved in crypto compliance, security, or policy development.
