FinCEN identified $312B suspicious flows tied to Chinese networks in U.S. banks, overshadowing the far smaller illicit footprint of cryptocurrencies worldwide.
Summary
- FinCEN review revealed $312B laundered through U.S. banks by Chinese networks between 2020 and 2024.
- Methods included shell firms, real estate, trade misinvoicing, money mules, and bank insiders.
- Illicit crypto flows totaled $189B over five years, under 1% of on-chain activity.
- Crypto firms face shutdowns for smaller sums, while banks implicated in hundreds of billions continue operating after fines.
- Evidence shows fiat systems remain the core laundering channels, while crypto is traceable and comparatively minor.
$312B in suspicious flows exposed by FinCEN
On Aug. 28, the U.S. Treasury’s Financial Crimes Enforcement Network released an extensive review of Chinese Money Laundering Networks.
The agency examined 137,153 Bank Secrecy Act reports submitted between January 2020 and December 2024 and documented around $312 billion in suspicious transactions.
Professional laundering rings such as the CMLNs use strategies far more sophisticated than those commonly associated with crypto, relying on shell companies, real estate holdings, and even trusted insiders at banks to disguise illicit funds.
FinCEN’s findings show that these groups often act as financial middlemen for Mexico-based drug cartels where the arrangement is mutually beneficial.
Mexican cartels with excess U.S. dollars from drug sales need to move that cash. Meanwhile, Chinese clients want access to those dollars to bypass Beijing’s strict currency controls.
The CMLNs make that exchange possible, turning cartel proceeds into usable yuan while keeping the flows hidden from regulators.
Trade-based money laundering is a frequent method, where fake invoices and shipments are
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Author: Ankish Jain
