Crypto criminals are increasingly avoiding centralised exchanges and instead using Chinese-language laundering networks, according to a new report from Chainalysis.
The blockchain analytics firm said on-chain money laundering activity processed about $82 billion in illicit funds in 2025, up sharply from $10 billion in 2020, as informal service-based networks gained traction.
Chainalysis said Chinese-language laundering networks, often operating through Telegram, now dominate known crypto money laundering activity by using money mules, informal over-the-counter desks and online gambling platforms.
“Compared to other laundering endpoints, inflows to identified Chinese-language networks have grown 7,325 times faster than those to centralised exchanges since 2020,”
The report said.
The shift has coincided with stricter compliance at centralised exchanges, which Chainalysis said has made it easier for platforms to freeze suspicious funds.
The firm estimates Chinese-language networks have processed around 20% of tracked illicit crypto flows over the past five years, equating to roughly $16 billion in 2025 alone.
Chainalysis said law enforcement must urgently improve crypto capabilities, with Royal United Services Institute director Tom Keatinge warning there is “a chasm in most countries between the capabilities of criminals and law enforcement when it comes to crypto use.”