As Crypto Money Laundering Soars, Governments Seek Ways to Fight Back

Crypto money laundering has surged at a staggering pace, reaching at least $82 billion last year, up from just $10 billion in 2020. As crypto markets have become more liquid, laundering operations have grown more sophisticated and more brazen, operating openly across messaging platforms and blockchains while governments struggle to keep up.

Much of the growth in crypto laundering has come from Chinese-language money-laundering networks, according to the report from Chainalysis. Those groups processed nearly $40 million worth of crypto per day in 2025. Chainalysis estimates that Chinese networks now launder more than 10% of the funds stolen worldwide in so-called “pig butchering” scams.

Moving to Social Media

These networks rely heavily on social media messaging platform Telegram, which is headquartered in Dubai. Telegram not only connects buyers and sellers of laundering services but also functions as an escrow hub.

Services such as money mules, OTC desks, and gaming sites began appearing on the platform in early 2020, during the onset of COVID-19. Over time, these social platforms have largely supplanted centralized crypto exchanges, many of which have tightened security controls in recent years.

The international nature of these scams, and the movement of funds across borders, has complicated law enforcement efforts. China, for its part, says it prosecuted more than 3,000 individuals for crypto laundering in 2024. There have also been some successful attempts at international collaboration. In October, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN), announced they had worked with the UK’s Foreign, Commonwealth, and Development Office to dismantle the Huione Group, which laundered roughly $4 billion from digital currency scams.

Anatomy of a Scam

Just this week, the U.S. Justice Department announced that Chinese national Jingliang Su was sentenced to 46 months in prison for his role in laundering millions of dollars in crypto. According to prosecutors, the criminals first contacted victims through social media, text messages, and online dating services to build trust. Su’s group then steered them into fraudulent crypto investments, using fake websites designed to mimic legitimate trading platforms.

More than $36.9 million in victim funds was ultimately transferred from U.S. bank accounts to a single account at Deltec Bank in the Bahamas. Deltec converted the funds into the stablecoin Tether before transferring the assets to a digital wallet controlled by Su’s group in Cambodia.

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Tags: ChainalysisChinacryptoFinCENMoney LaunderingScamsU.S. Treasury