Between 2020 and 2024, United States banks processed $312 billion linked to Chinese money launderers. This information comes from a recent analysis of Bank Secrecy Act reports, despite ongoing scrutiny of cryptocurrency’s role in illicit finance.
The US Financial Crimes Enforcement Network (FinCEN) conducted an analysis of over 137,000 Bank Secrecy Act reports filed between 2020 and 2024. Their findings revealed that Chinese money launderers moved an average of $62 billion annually through the U.S. banking system during this period. This substantial flow of funds highlights the continued reliance of illicit actors on traditional financial institutions.
FinCEN’s report indicates that Chinese money-laundering networks maintain a symbiotic relationship with drug cartels based in Mexico. These cartels require mechanisms to launder U.S. dollar drug proceeds, while Chinese gangs seek U.S. dollars to bypass China’s currency control regulations. This mutual need has fostered a collaborative arrangement between the two criminal entities.
FinCEN Director Andrea Gacki stated, “These networks launder proceeds for Mexico-based drug cartels and are involved in other significant, underground money movement schemes within the United States and around the world.” Beyond drug money laundering, these Chinese gangs are implicated in various other criminal activities, including human trafficking, smuggling, healthcare fraud, and elder abuse.
The report also detailed that Chinese gangs are involved in real estate money laundering. Suspicious transactions in this sector totaled $53.7 billion. This highlights the diverse methods employed by these networks to integrate illicit funds into the legitimate economy.
Despite the significant sums laundered through traditional banking channels, cryptocurrency has often faced criticism. Senator Elizabeth Warren, a ranking member of the Senate Banking Committee, has been a vocal proponent of stricter crypto regulations. Earlier this year, Senator Warren stated, “Bad actors are also increasingly turning to cryptocurrency to enable money laundering,” as she called for tougher regulations.
Data from the United Nations Office on Drugs and Crime indicates that the estimated amount of money laundered globally each year exceeds $2 trillion. Comparatively, Chainalysis reports that illicit crypto volumes totaled approximately $189 billion over the past five years. This figure encompasses all forms of illicit activity within the cryptocurrency space.
Angela Ang, Head of Policy and Strategic Partnerships at TRM Labs, noted, “Illicit activity is but a small fraction of the crypto ecosystem. We estimate that it is less than 1% of overall crypto volume.” Ang added, “FinCEN’s findings align with a broader pattern – these underground banking networks function as a shadow financial system for organized crime worldwide, operating at the seams of banking systems.”
These figures suggest that money laundering carried out through cash and traditional banking systems far surpasses the amount laundered using cryptocurrency.
