The crypto industry has long been hyped for its transparency and ability to disrupt traditional financial systems. However, a new investigation, The Coin Laundry, exposes how some of the world’s biggest crypto platforms have been linked to illicit activities, leaving victims with few options for recovery.
Tracking the Flow of Illicit Funds Across Borders
The Coin Laundry investigation involved a collaboration between the International Consortium of Investigative Journalists (ICIJ) and 37 media partners across 35 countries. Over a period of 10 months, the team gathered hundreds of cryptocurrency wallet addresses linked to criminal activity. These addresses, related to bank account numbers, were tracked using various sources such as police reports, court records, scam victim reports, and blockchain transaction data.
The journalists also conducted test transactions to verify the flow of funds across major crypto exchanges. The team analyzed tens of thousands of transactions recorded on public blockchains, revealing how criminal networks exploit these digital platforms. Through this painstaking work, they were able to track the global flow of money tied to cybercrime, including money laundering, theft, and fraud.
Major Crypto Exchanges Facilitate Criminal Transactions
The investigation uncovered how well-known cryptocurrency exchanges such as Binance and OKX played key roles in facilitating the movement of illicit funds. A particularly troubling finding involved the Huione Group, a Cambodian financial institution flagged by U.S. authorities as a “primary money laundering concern.” From July 2024 to July 2025, Huione transferred over $408 million in Tether, a major cryptocurrency, to Binance, the world’s largest crypto exchange. These transfers occurred despite Binance being under supervision due to a 2023 settlement over U.S. anti-money laundering law violations.
The investigation also revealed that a portion of these illicit funds flowed into OKX, another major exchange, amounting to at least $226 million. OKX had already pleaded guilty earlier in 2024 to operating as an unlicensed money transmitter and was subjected to a $504 million penalty. Despite these settlements, both Binance and OKX continued to process these transactions well after Huione’s designation as a money laundering concern.
Crypto Services as Hubs for Money Laundering and The Scale of Crypto Scams
Beyond the exchanges themselves, the investigation uncovered the existence of so-called “cash desks” and courier services that allow individuals to convert cryptocurrency into fiat money or other forms of value without regulatory oversight. These services, often found in cities such as Hong Kong, London, Toronto, and Istanbul, facilitate money laundering by providing a pathway for criminals to move illicit funds undetected.
Operating outside of most financial regulations, these services offer anonymity to users, making it difficult for authorities to trace transactions. As the investigation revealed, this unregulated segment of the crypto economy continues to thrive, providing a safe haven for criminals seeking to launder money. In addition to money laundering, the investigation uncovered the growing use of cryptocurrency in large-scale scams. One of the most significant cases examined was that of Vladimir Okhotnikov, a Russian entrepreneur accused of running a massive Ponzi scheme.
Okhotnikov’s platform defrauded investors of at least $340 million between 2020 and 2022 by promoting a fake cryptocurrency investment program. Although U.S. prosecutors indicted him in 2023, Okhotnikov remains free in Dubai, continuing to launch similar fraudulent schemes. Okhotnikov’s scams were promoted using celebrity endorsements and high-profile social media campaigns, which helped him attract a global network of victims.
The Complexity of Tracing Cryptocurrency Transactions
One of the core issues highlighted by The Coin Laundry is the complexity involved in tracing illicit cryptocurrency transactions. While blockchain technology records every transaction on a public ledger, the use of digital wallets and tools such as “swappers” (which allow users to exchange cryptocurrencies without identity checks) makes it difficult for authorities to track the movement of funds. These tools obscure the identities of those involved in transactions, making enforcement challenging.
Former compliance officers at major exchanges, including Binance and OKX, have reported that even with the latest blockchain analytics tools, it is difficult to keep up with the increasing sophistication of criminal activity. The sheer scale of the transactions and the anonymity provided by the decentralized nature of cryptocurrency further complicate efforts to detect and stop illicit activity.
Regulatory Shortcomings: A Collapsed Global Approach
The investigation also highlights the fragmented and inconsistent regulatory environment surrounding cryptocurrency. Although some countries have implemented regulations to combat money laundering and fraud, there is no unified global framework. The lack of coordination between national regulators allows criminals to exploit jurisdictional gaps and continue their illegal activities with minimal oversight.
Despite efforts by some countries to introduce stricter laws, such as the consumer protection and transparency regulations that came into effect in Europe at the end of 2024, many experts believe that these measures do not go far enough to protect users or curb the use of cryptocurrencies in illegal activities.
In the U.S., the regulatory landscape has been further complicated by recent political actions, such as the pardon of Binance founder Changpeng Zhao in 2025, which raised questions about the effectiveness of enforcement. The impact of cryptocurrency-related crimes on victims is staggering. In the U.S. alone, the FBI estimates that Americans lost $9.3 billion to crypto-related scams and crimes in 2024, a 67% increase from the previous year.
Ongoing Struggles in Combatting Crypto Crime
As the global debate over how to address cryptocurrency-related crime continues, The Coin Laundry investigation shows just how difficult it is to combat this growing problem. Authorities struggle to keep up with the rapid pace of technological advancements and the increasing volume of crypto transactions. While some countries are beginning to implement stronger regulations, these efforts are often thwarted by the decentralized nature of cryptocurrencies and the global reach of criminal enterprises.
In light of the findings, there is growing concern that without significant reform, the cryptocurrency industry will continue to facilitate illicit activities at a scale that is difficult to control. The challenges of regulating a borderless, decentralized system, coupled with the lack of global coordination, create a perfect storm for financial crime.
The Coin Laundry investigation reveals the urgent need for more robust consumer protection measures and greater oversight of the cryptocurrency industry. While some progress has been made in recent years, especially with new regulations in Europe, the global regulatory framework remains insufficient to prevent money laundering, scams, and other forms of financial crime.
