Money Laundering as a Service

Inspired by the learnings from The Crypto Launderers (by David Carlisle), I took to the internet to learn more about how criminals use crypto.

Only to realize how much I do not know.

TRM Labs published a report on how crypto is increasingly used to move value across borders without ever touching a bank account.

Here are three snapshots that stuck with me:

1. Trade-based money laundering

   A Chinese broker collects drug dollars from a Mexican cartel in the U.S., delivers the equivalent in Mexican pesos, and simultaneously supplies U.S. dollars to a Chinese elite looking to evade capital controls. In return, the broker receives RMB back in China.

   No bank accounts. No wires. Value moves across continents instantly.

2. Crypto itself is not a crime. It is only a conduit.

   North Korea, for instance, doesn’t just hack billions in crypto. DPRK uses Chinese OTC brokers to cash it out, often via Hong Kong shell companies and sanctioned goods. Triad groups are running online casinos, buying precursor chemicals with Bitcoin, and converting drug profits into clean, spendable assets.

   Crypto hasn’t created new crimes. It’s simply optimized the old ones.

3. Geopolitical nexus

   North Korean hackers steal crypto. Chinese networks launder it. Russian actors provide the ransomware infrastructure, the mixers, the darknet exchanges.

   TRM calls it an “illicit finance alliance.” Each actor contributes. Each one gains.

The report reminded me that crypto ecosystem doesn’t exist in a vacuum. It intersects with geopolitics, global crime, sanctions, and regulatory blind spots.

And while decentralization offers transparency (law enforcement agencies are tracing mixers, mapping networks, freezing wallets…), the scale and speed of innovation makes it an uphill battle.

Let me know what part you found to be the most interesting.

Report

Thanks for reading, and have a great week ahead!