Crypto Emerges as Key Software in China’s Cash Laundering Networks: Report

China’s long-running marketing campaign to limit capital flight is being undercut by its personal legal networks, which have more and more turned to Bitcoin and different digital belongings to maneuver cash throughout borders, based on new analysis.

Key Takeaways:

• Chinese language cash laundering networks are more and more utilizing Bitcoin and USDT to bypass strict capital controls.
• The identical networks now serve Western legal teams, together with the fentanyl provide chain.
• Researchers warn that crypto-enabled laundering has develop into so globalized that no single jurisdiction can sort out the issue alone.

A paper revealed this month by Kathryn Westmore, a senior analysis fellow on the Centre for Finance and Safety on the Royal United Providers Institute, argues that cryptocurrencies have develop into a central pillar of China’s underground monetary system.

Chinese language Laundering Networks Flip to Crypto to Evade Capital Controls

Westmore stated Chinese language Cash Laundering Organisations (CMLOs) are actually routinely utilizing digital belongings as conduits for illicit money.

“More and more, [CMLOs] are incorporating cryptocurrencies inside their operations, offering criminals with digital belongings, resembling Bitcoin, or stablecoins, resembling Tether USDT, in return for his or her soiled money,” she wrote.

These digital belongings then function a software for people to quietly shift wealth offshore, bypassing strict capital controls that restrict the motion of funds overseas.

The shift comes amid a broader surge in crypto-related crime. Investor losses surpassed $2.3 billion in 2025, whereas pig-butchering scams drained $4 billion from victims in 2024, based on Chainalysis.

Westmore’s analysis provides one other dimension to that panorama, exhibiting that Chinese language laundering teams have additionally develop into essential monetary intermediaries for Western legal operations, together with the fentanyl provide chain.

The report describes how drug proceeds collected in the US are transformed into Bitcoin or USDT, then routed to offshore accounts belonging to rich Chinese language shoppers in search of discreet channels to maneuver funds overseas.

The usage of crypto extends past laundering providers. Many Chinese language sellers of fentanyl precursor chemical substances now settle for Bitcoin and USDT instantly, successfully turning digital belongings into settlement infrastructure for the artificial opioid commerce.

Blockchain analytics agency Elliptic has corroborated these claims, documenting onchain funds to China-based chemical suppliers tied to international fentanyl distribution networks.

With crypto rails woven deeply into these transnational laundering techniques, Westmore warns that the issue is simply too huge for any single authorities to deal with.

Europol Busts Ring Behind 49 Million Pretend Accounts Tied to Crypto

In October, Europol dismantled a complicated cybercrime syndicate accused of making greater than 49 million pretend on-line accounts, together with fraudulent profiles linked to main cryptocurrency platforms.

The operation, codenamed “SIMCARTEL,” uncovered a complicated SIM farm-for-hire community that offered non permanent cellular numbers used to bypass two-factor authentication, permitting criminals to mass-produce pretend identities and commit large-scale monetary fraud.

In line with Europol, the syndicate’s infrastructure supported account creation for a variety of on-line providers, from e-commerce websites to digital banks and crypto exchanges.

These pretend accounts had been then used to launder illicit funds, run phishing campaigns, and facilitate smishing scams focusing on European customers.

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