The post Chinese underground banks are the financial lifeline of organized crime groups worldwide: TRM Labs appeared on BitcoinEthereumNews.com.

According to a May 2025 report from TRM Labs, Chinese underground banking networks have become critical for the operations of organized crime groups worldwide.  These networks, also known as “fei qian” or flying money, operate in the shadows and function outside traditional banking regulations, and as a result, facilitate an array of illicit activities, from drug trafficking to cybercrime. The symbiotic relationship between global crime networks and Chinese underground banks According to TRM Labs’ report, there is a symbiotic relationship between Chinese underground banks and organized crime groups worldwide, and it operates beyond regulatory oversight. These networks have been known to use informal value transfer systems, such as “mirror exchanges,” to move funds across borders, which helps them avoid triggering the AML alarms in regulated banking systems. This network allows a broker in the U.S. to collect drug cartel cash and provide equivalent value in China—often in cryptocurrency or through trade-based money laundering (TBML)—without any cross-border wire transfers. In this way, cartels have been able to repatriate illicit earnings while helping wealthy Chinese clients interested in capital flight evade China’s strict capital controls, creating a mutually beneficial partnership. TRM Labs says these networks’ reach now extends globally, allowing them to serve a diverse clientele of criminal organizations from Mexican cartels to North Korean hackers. The cartels, for example, reportedly rely on Chinese underground bankers to launder drug proceeds, as seen in a Los Angeles-based ring that laundered over USD 50 million in narcotics revenue via crypto and trade-based schemes. Similarly, North Korean hackers depend on Chinese over-the-counter (OTC) brokers to convert stolen digital assets into fiat currency or commodities, evading global sanctions. The symbiotic ecosystem thrives on the ability of underground banks to act as a bridge between the cash-heavy criminal underworld and the formal economy. It depends on encrypted…

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Filed under: News - @ May 26, 2025 11:23 pm