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US Banks Moved $312 Billion Linked to Chinese Money Laundering Networks
A new FinCEN advisory reveals that US banks processed roughly $312 billion tied to Chinese money-laundering networks between 2020 and 2024. The Financial Crimes Enforcement Network analyzed more than 137,000 Bank Secrecy Act (BSA) reports and concluded that these networks moved, on average, over $62 billion per year through the US banking system. These figures highlight how traditional finance, not just crypto, remains a primary channel for large-scale money laundering.
Symbiosis with Mexican drug cartels and broader criminal activity
FinCEN’s findings show Chinese gangs have developed a mutually beneficial relationship with Mexico-based drug cartels: cartels require US dollars to disguise drug proceeds, while Chinese networks seek dollars to evade China’s currency controls. “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,” said FinCEN Director Andrea Gacki.
Beyond narcotics proceeds, the advisory links these networks to human trafficking, smuggling, healthcare fraud, elder abuse, and extensive real estate money laundering. The report flagged approximately $53.7 billion in suspicious real estate transactions tied to these groups, underscoring the role of US banks and property markets in facilitating illicit finance.
Why crypto is still singled out despite smaller illicit volumes
Despite the scale of bank-facilitated laundering, cryptocurrency continues to draw political ire. High-profile lawmakers, including Senator Elizabeth Warren, have called for tougher regulations, arguing that bad actors increasingly use crypto to launder funds. However, blockchain analytics and industry studies tell a different story.
According to Chainalysis, illicit crypto flows totaled roughly $189 billion across the last five years. By contrast, the United Nations Office on Drugs and Crime estimates global money laundering exceeds $2 trillion annually. TRM Labs estimates that illicit activity represents less than 1% of overall crypto transaction volume, a fraction compared with traditional finance vulnerabilities.
What this means for AML policy and crypto regulation
FinCEN’s advisory refocuses the debate on where to apply anti-money-laundering (AML) enforcement and regulatory resources. The data suggest law enforcement and regulators should prioritize underground banking networks, correspondent banking risks, and real estate channels alongside continued improvements in crypto compliance — including improved KYC, on-chain analytics, and cross-border cooperation.
Policymakers must balance sensible crypto regulation with robust oversight of traditional financial institutions that continue to move massive illicit dollar volumes. For blockchain and crypto communities, the takeaway is clear: invest in compliance, transparency, and analytics so digital assets are part of the solution in combating global money laundering, not an easy scapegoat.
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