Blockchain analytics firm Chainalysis reveals a seismic shift in crypto money laundering: Chinese-language service networks now dominate the space, processing an estimated $16 billion of the $82 billion in illicit funds laundered on-chain in 2025. Since 2020, inflows to these networks have grown 7,325 times faster than those to centralized exchanges.
20% of Illicit Flows via Chinese Networks
Over the past five years, Chinese-language laundering networks handled roughly 20% of all traced illicit crypto funds. Chainalysis describes these operations as “laundering-as-a-service” — using money mules, informal OTC desks, and gambling platforms to mix and convert digital assets. Meanwhile, the share flowing through centralized exchanges has steadily declined, attributed to exchanges’ ability to freeze funds.
Telegram-based Chinese services now account for a “disproportionate share” of the global on-chain money laundering map, per the report.
Explosion in On-Chain Laundering
The overall ecosystem has ballooned. Estimated illicit laundering volume hit $82 billion in 2025, up from $10 billion in 2020. The Chinese network alone moved $16 billion — roughly $44 million per day. Chainalysis attributes the growth to rising crypto accessibility and liquidity, describing it as a “fundamental transformation in how and by whom laundering is conducted.”
Enforcement Gap Widens
To disrupt these networks, Chainalysis urges authorities to target the operators and their Telegram channels. Tom Keatinge, director of the Centre for Financial and Security Studies at RUSI, warns of a “vast gap” between criminals and law enforcement in crypto capabilities. While blockchain tracing firms have helped in some cases, he calls this “the tip of the iceberg” and stresses the need for a “global systematic effort” to boost enforcement skills and information-sharing.