US banks processed an estimated $312 billion in suspicious funds tied to Chinese laundering networks from 2020 to 2024, a federal advisory says. Yet, despite these volumes, many politicians still direct blame at crypto rather than traditional finance, critics note. FinCEN’s new advisory and trend analysis detail how these networks operate across U.S. institutions and partner with Mexico-based cartels. The figures further contrast with industry estimates showing illicit crypto activity forms a small share of overall crypto volume.
Banks moved $312B
FinCEN analysed 137,153 Bank Secrecy Act reports filed between January 2020 and December 2024, totalling about $312 billion in suspicious activity. The advisory highlights Chinese money laundering networks as pervasive and global, with clear links to Mexico-based drug cartels. On average, more than $62 billion annually flowed through U.S. financial institutions via these networks during the period, the analysis shows.
The U.S. Treasury framed the threat as urgent, citing fentanyl poisoning and broader community harms as outcomes of these laundering pipelines. FinCEN Director Andrea Gacki said these networks launder cartel proceeds and run underground schemes in the United States and worldwide. The advisory aims to help banks detect red flags and strengthen monitoring of suspected laundering typologies tied to Chinese networks.
Cartel ties and tactics
FinCEN’s publications describe a symbiotic relationship between Chinese networks and Mexico-based drug cartels, driven by cartels’ dollar needs and China’s currency controls. The networks channel U.S. drug proceeds while meeting Chinese actors’ demand for U.S. dollars outside formal channels, authorities report. As a result, cartels and Chinese brokers exploit the U.S. financial system’s reach and liquidity at a substantial scale, the reports suggest.
The Treasury urged institutions to watch for indicators among customers presenting Chinese passports and handling volumes inconsistent with stated occupations, reflecting common mule profiles. Reported red flags include mismatched or suspicious identification documents and patterns typical of structured movement across accounts, FinCEN notes. Officials stressed rapid identification can disrupt illicit flows that fuel drug trafficking and related crimes nationwide.
Beyond drugs: broader crimes
FinCEN links these laundering networks to other offences, including human trafficking, smuggling, healthcare fraud, and elder abuse, broadening the risk landscape. The trend analysis also flags suspicious real estate activity, citing about $53.7 billion in transactions tied to laundering concerns, affecting property markets and community integrity. Authorities warn the networks function as part of a shadow financial system for organised crime that skirts formal oversight.
Public advisories emphasise that these schemes operate within and across traditional banking, leveraging insiders, intermediaries, and layered transactions to obscure sources. As a result, financial institutions are urged to tighten onboarding and surveillance to counter increasingly sophisticated techniques. Enhanced vigilance may deter misuse of accounts that mirror everyday customer profiles yet move large, incongruent sums, authorities argue.
Crypto blame vs. data
Despite the banking figures, lawmakers often single out crypto as a primary laundering vector, calling for tougher rules across digital assets, critics observe. Industry analyses show illicit crypto activity remains a small fraction of total crypto volume, with recent work estimating around 0.4% to 0.86% during 2023–2024 and falling year over year. TRM Labs reports 2024 illicit crypto volume at about $45 billion, or 0.4% of all crypto transactions, amid rising total on-chain activity.
US banks’ suspected $312 billion role reflects entrenched infrastructure, cartel collaboration, and varied criminal enterprises, FinCEN’s analysis concludes. As banks refine controls, targeted detection of high-risk profiles and patterns may curb illicit flows more effectively, officials argue. And as crypto oversight evolves, data indicates illicit activity remains a small share of overall crypto volume, especially compared with traditional channels, current reports show.
Written By Fazal Ul Vahab C H
