US Banks Surpass Crypto in Money Laundering Volume

US banks processed $312 billion for Chinese laundering networks, surpassing crypto.

From 2020 to 2024, US banks processed transactions amounting to $312 billion for Chinese money laundering networks. Data from the FinCEN revealed that the majority of these funds flowed through the traditional financial system rather than cryptocurrencies.

On average, over $62 billion per year passed through the American banking system. FinCEN analyzed more than 137,000 reports filed under the Bank Secrecy Act.

According to the document, Chinese money laundering networks collaborate with Mexican drug cartels, which launder drug sale proceeds in US dollars. Chinese groups use these funds to circumvent China’s currency controls.

“These networks launder proceeds for Mexican drug cartels and are involved in other large-scale money movement schemes in the US and globally,” stated FinCEN Director Andrea Gacki.

Additionally, these groups engage in human trafficking, healthcare fraud, and real estate fraud. In the latter category, suspicious transactions amounted to $53.7 billion.

The UN estimates that over $2 trillion is laundered globally each year. By comparison, according to Chainalysis, the total volume of illicit transactions using digital assets over the past five years was approximately $189 billion.

“Illicit activity is just a small part of the crypto ecosystem. We estimate it to be less than 1% of the total volume,” commented TRM Labs Head of Policy Angela Eng to Cointelegraph.

She added that FinCEN’s findings confirm a general trend: underground banking networks operate as a shadow financial system for organized crime, functioning at the intersection of TradFi.

Earlier in August, analysts at Global Ledger identified the speed of fund withdrawal by perpetrators after hacks as the main issue facing the crypto industry.