US Banks Laundered $312B for Chinese Gangs and Cartels — But Crypto Still Gets the Blame

$312 Billion Moved Through US Banks

According to a new Financial Crimes Enforcement Network (FinCEN) advisory released Thursday, US banks processed $312 billion in illicit funds linked to Chinese money laundering networks between 2020 and 2024.

The analysis, based on over 137,000 Bank Secrecy Act (BSA) reports, found that an average of $62 billion per year flowed through the US financial system from Chinese money laundering groups.

These networks have established a symbiotic partnership with Mexican drug cartels:

• Cartels require US dollar laundering for narcotics proceeds.

• Chinese gangs seek US dollars to bypass China’s strict currency controls.

“This is not limited to drug money,” noted FinCEN Director Andrea Gacki. “These networks are also tied to human trafficking, elder abuse, healthcare fraud, and large-scale real estate laundering schemes.”

The report highlighted $53.7 billion in suspicious US real estate transactions tied to these networks.

Source: Nate Geraci

Related: World Liberty Financial Proposes USD1 Stablecoin Airdrop to Early WLFI Holders

Crypto Scapegoated Despite Small Share of Laundering

Despite banks facilitating hundreds of billions in dirty money, crypto continues to bear the brunt of political criticism.

Earlier this year, Senator Elizabeth Warren, ranking member of the Senate Banking Committee, claimed:

“Bad actors are also increasingly turning to cryptocurrency to enable money laundering,”

and called for stricter regulation.

Source: https://x.com/WSJ/status/1961073377977712878

However, the data paints a different picture:

• Global money laundering totals more than $2 trillion annually, according to the United Nations Office on Drugs and Crime.

• Illicit crypto transactions accounted for just $189 billion over the past five years, per Chainalysis.

• That represents less than 1% of overall crypto volume, according to TRM Labs head of policy Angela Ang.

“FinCEN’s findings confirm what we’ve long observed: underground banking networks act as a shadow financial system for organized crime, and they operate inside traditional banking channels,”.

Money laundering through cash and banks dwarfs the amount laundered with crypto. Source: Zigram

The Bigger Picture

While policymakers often highlight cryptocurrency’s risks, the reality is that traditional banks remain the largest enablers of global money laundering.

The latest FinCEN report reinforces a critical point: crypto’s role in illicit finance is minimal compared to the legacy banking system. Yet, crypto continues to face disproportionate scrutiny, while the largest cases of laundering flow through regulated institutions.

Conclusion

The $312 billion scandal involving US banks, Chinese launderers, and Mexican cartels shows that illicit finance is a systemic issue deeply embedded in the traditional financial system.

Until lawmakers address these structural weaknesses, focusing solely on crypto risks obscuring the true scale of the problem — and allowing the real pipelines of dirty money to remain in plain sight.

Related: US Bank Groups Push to Close GENIUS Act Stablecoin Yield ‘Loophole’

FAQs

1. How much money did US banks launder for Chinese gangs and cartels?

According to FinCEN, US banks processed $312 billion in illicit funds linked to Chinese laundering networks and Mexican drug cartels between 2020 and 2024.

2. Why are Chinese gangs working with Mexican cartels?

Chinese networks need US dollars to bypass China’s currency controls, while cartels rely on them to launder narcotics proceeds, creating a mutually beneficial system.

3. How much illicit finance flows through cryptocurrency compared to banks?

Global money laundering exceeds $2 trillion annually, but illicit crypto transactions were only $189 billion over five years — less than 1% of crypto activity.

4. Why does crypto get more political blame than banks?

Despite banks being the main channel for dirty money, crypto faces disproportionate criticism from regulators and lawmakers as an easier scapegoat.

5. What did the FinCEN report reveal about real estate laundering?

The report highlighted $53.7 billion in suspicious US real estate transactions tied to these laundering networks, showing systemic abuse of traditional finance.