Chinese-language money laundering networks processed $16.1 billion in cryptocurrency during 2025 and now represent approximately 20% of all known crypto laundering activity, according to Chainalysis's 2026 Crypto Crime Report released Monday.
What Happened: Telegram-Based Networks Dominate Laundering
The blockchain analytics firm identified more than 1,799 active wallets operating within these Telegram-based networks, which move roughly $44 million daily.
Inflows to these networks have grown 7,325 times faster than those to centralized exchanges since 2020. They have also expanded 1,810 times faster than decentralized finance inflows and 2,190 times faster than other illicit on-chain flows.
Chainalysis documented six distinct service types within the ecosystem: running point brokers who recruit individuals to receive fraudulent proceeds, money mule networks handling fund layering, informal over-the-counter services advertising transactions without identity verification, Black U services selling tainted cryptocurrency at discounts, gambling operations, and mixing services.
Black U services demonstrated the fastest growth, reaching $1 billion in cumulative inflows within 236 days. Average clearing time for large transactions dropped to 1.6 minutes in the fourth quarter.
U.S. enforcement agencies have responded with designations and advisories. FinCEN issued a Final Rule designating Huione Group as a primary money laundering concern, while the Treasury's OFAC and the UK's OFSI designated Prince Group.
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Why It Matters: Capital Controls Fuel Criminal Infrastructure
Tom Keatinge, Director of the Centre for Finance & Security at RUSI, attributed the rapid expansion to Chinese capital controls. Wealthy individuals seeking to circumvent restrictions provide liquidity that ultimately services transnational organized crime groups across Europe and North America.
Chris Urben, Managing Director at Nardello & Co, said the transition from traditional informal value transfer systems to crypto has been the most significant recent development. He noted that cryptocurrency allows movement of funds across borders with less compliance scrutiny than banks and the ability to store billions on a hard drive.
Enforcement actions against platforms like Huione have proven disruptive, but vendors simply migrate to alternatives.
Urben said effective detection requires combining open-source intelligence, human sources, and blockchain analysis to map networks and match operators to currency movements.
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