According to a report by TRM Labs, various criminal organizations, including North Korean hackers and Mexican drug cartels, depend heavily on underground Chinese banking networks to launder billions in cryptocurrency. These networks are crucial in converting illicit funds into usable fiat currency. TRM highlights that U.S. law enforcement has yet to adequately address this issue, treating different forms of crypto crime in isolation instead of recognizing the shared reliance on Chinese money laundering services. The report notes a significant example where North Korean hackers executed a record $1.4 billion theft from the Bybit exchange, subsequently laundering the funds through Chinese intermediaries. The TRM investigation asserts that dismantling these laundering networks could cripple organizations like the Sinaloa Cartel that use Chinese services to handle stablecoins. Despite a crackdown by the Chinese government on crypto-related money laundering, the black market remains resilient, prompting calls for a more coordinated U.S. response to target these issues comprehensively. Experts advocate for offensive strategies against these syndicates, which could enhance U.S. efforts to combat international crypto crime effectively.

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