According to a recent report by Chainalysis, Chinese-language money laundering networks (CMLNs) processed a staggering $16.1 billion in illicit cryptocurrency funds in 2025. This figure underscores a significant transformation in the landscape of crypto crime, particularly in how criminal proceeds are funneled through the ecosystem.
The report, which serves as a preview of the forthcoming Chainalysis 2026 Crypto Crime Report, reveals that CMLNs have surged in prominence, now managing roughly 20% of all known illicit crypto laundering activities over the past five years. With an average daily transaction volume of approximately $44 million across more than 1,799 active wallets, these networks have dramatically outpaced traditional centralized exchanges, with inflows growing an extraordinary 7,325 times faster since 2020.
In contrast, flows to decentralized finance (DeFi) platforms and intra-illicit on-chain transfers increased at much slower rates of 1,810 times and 2,190 times, respectively. The overall illicit on-chain money laundering ecosystem has ballooned from $10 billion in 2020 to over $82 billion in 2025, reflecting heightened liquidity and evolving methods for moving illicit funds.
Chainalysis attributes the emergence of CMLNs to the onset of the COVID-19 pandemic, observing that these networks operate openly across various platforms with a sophisticated, layered operational structure. The report characterizes these networks as industrial-scale entities that have demonstrated remarkable resilience, enabling them to adapt quickly to disruptions.
Notably, CMLNs consistently launder more than 10% of the funds associated with “pig butchering” scams, a type of fraud that has seen a significant rise in recent years. Meanwhile, laundering activities through centralized exchanges have declined, largely due to the ability of these platforms to freeze suspicious funds.
Chainalysis highlights the role of guarantee platforms, such as Huione and Xinbi, which serve as marketplaces and escrow infrastructures for vendors. However, these platforms do not engage directly in the laundering process, which contributes to the overall metrics. Recent enforcement actions, including sanctions against the Prince Group and designations by the U.S. Treasury Department”s OFAC, have disrupted operations within these networks, yet many vendors have simply shifted to alternative channels.
The report delineates six service categories within the CMLN ecosystem, including running point brokers who act as entry points for illicit funds by recruiting individuals to rent out financial identities. Money mules facilitate the layering of illicit funds across multiple accounts and wallets, employing methods that range from in-person exchanges to third-party payment platforms.
Chainalysis also noted that informal over-the-counter (OTC) services often evade regulatory oversight and KYC requirements, thereby contributing to the growing complexity of illicit financial activities within the cryptocurrency space. The report indicates that the speed at which certain services can process illicit funds varies significantly, with some categories handling vast amounts in a matter of days.
This comprehensive analysis underscores the urgent need for enhanced regulatory measures and innovative solutions to combat the rising tide of crypto-related crime, particularly as the infrastructure supporting these illicit activities becomes increasingly sophisticated.
