- FinCEN reports U.S. banks’ $312B Chinese-linked suspicious transactions.
- Minimal crypto sector involvement noted.
- Increased global cooperation and monitoring advised.
Between 2020 and 2024, U.S. banks processed $312 billion in transactions linked to Chinese money laundering networks, primarily benefiting Mexican drug cartels, according to FinCEN data.
The banking sector’s involvement highlights ongoing vulnerabilities in traditional financial systems, overshadowing the much smaller scale of illicit activity within the crypto market, raising questions about regulatory focus and priorities.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) reported that American banks processed $312 billion in suspicious transactions from 2020-2024. These were mainly related to Chinese money laundering networks.
FinCEN has identified Chinese Money Laundering Networks (CMLNs) as key players in these transactions. They exploited U.S. financial institutions using shell companies and money mules. No comments from major bank or crypto CEOs were recorded on this matter.
Traditional banks have managed volumes greatly exceeding those in the crypto sector, affecting financial markets but without influencing crypto-linked Total Value Locked or liquidity parameters. The implication on fiat banking rails has been significant, though digital assets remain largely unaffected.
FinCEN suggests immediate action from global financial systems to enhance transaction monitoring. It continues observing CMLN activities tied to operation methods contributing to fiscal concerns. Financial cooperation is vital in combating illicit fund movements. As Andrea Gacki, Director of FinCEN, stated, “These networks launder proceeds for Mexican drug cartels and are involved in other large-scale money movement schemes in the US and globally.”
No recent activity involving cryptocurrencies like ETH or BTC has resulted from these findings. U.S. banks will bolster vigilance to curtail deficiencies highlighted. Crypto’s role in this particular event is minimal.
Future financial implications could require stricter regulations. However, with less than 1% of crypto transactions labeled illicit, the sector shows comparative resilience. Observations suggest continuing critique for banks engaging in such operations, as Angela Eng, Head of Policy at TRM Labs, noted, “Illicit activity is just a small part of the crypto ecosystem. We estimate it to be less than 1% of the total volume.”
