Crypto Exchange and Money Laundering: $28 Billion in Suspended Dirty Money

According to a joint investigation coordinated by major international investigative agencies, at least 28 billion dollars derived from criminal activities have found their way into major global cryptocurrency exchanges over the past two years. This phenomenon represents a critical issue that reveals the structural vulnerability of the sector, even as cryptocurrencies are gaining mainstream legitimacy.

The Scope of the Problem

The joint investigation by multiple international news outlets traced illicit capital flows from various criminal sources: hackers, scammers, extortionists, and organized crime groups. These groups, operating from the North to Southeast Asia and beyond, have developed sophisticated transfer mechanisms to authorized global trading platforms.

Emerging data is alarming. At least 4 billion dollars linked to scams have flowed into exchanges in 2024 alone. During the same period, over 500 million dollars have been transferred through crypto-cash exchange shops to major international exchanges. Additionally, a specific criminal organization moved over 400 million dollars to trading platforms, with another 900 million dollars coming from operations by North Korean hackers.

The Role of Platforms

Exchange platforms claim to implement strict compliance and security standards. However, the investigation documents that, despite public promises and agreements with government authorities, illicit money flows continued to flow through these channels even after official bans and administrative sanctions.

A leading global platform formally acknowledged in 2023 that it had processed transactions for terrorist organizations, reaching a settlement of 4.3 billion dollars. Yet, it subsequently received hundreds of millions of dollars from suspicious sources.

Another notable platform, after reaching a settlement of 504 million dollars for regulatory violations, continued to receive over 220 million dollars from wallets linked to criminal groups in the five months following the agreement.

Money Laundering Chains

Criminal operations follow well-defined paths. The first channel involves the use of fake accounts registered to individuals whose personal data has been compromised. Investigators have documented accounts registered in rural villages in Myanmar and remote regions of China, used to move millions of dollars in a few months—figures completely disproportionate to local incomes.

A second channel involves crypto-cash exchange shops, widespread in Ukraine, Poland, the United Arab Emirates, and other regions. These physical outlets operate with minimal identity verification standards, enabling quick and anonymous conversions between cryptocurrencies and traditional currencies. Last year, exchanges of this kind handled transactions worth over 2.5 billion dollars just in Hong Kong.

Victims and Impact

Cryptocurrency investment scams have caused estimated losses of 5.8 billion dollars according to US federal authorities. The most sophisticated schemes, such as “pig butchering,” involve scammers establishing romantic relationships with victims before directing them toward fraudulent investments.

A documented case study reveals how a parent from Minnesota was defrauded of 1.5 million dollars, with the funds subsequently traced to exchange platforms. Analyzing the accounts used, it emerged that thousands of suspicious transactions pass daily through these channels without adequate blocking measures.

The Responsibility Issue

Industry experts highlight a fundamental conflict of interest: platforms generate revenue from transaction volumes, creating implicit incentives to tolerate illegitimate activities. Although exchanges have implemented compliance teams, their actual capacity to identify and arrest suspicious flows remains questionable.

Investigative authorities report being significantly overwhelmed, while resources dedicated to combating these crimes have been scaled back. The current situation is unsustainable: the sector continues to grow in volume and sophistication, while control mechanisms remain inadequate.

Future Perspectives

The cryptocurrency sector stands at a critical crossroads. Mainstream integration into the financial system cannot proceed without systematically addressing money laundering issues. Without significant structural interventions—by both platforms and authorities—the phenomenon of 28 billion dollars annually in illicit funds will pose a permanent obstacle to the legitimate and widespread adoption of blockchain technologies.