China Is Fueling Crypto Crime, From North Korea to Mexican Cartels: TRM
North Korean hackers, Mexican drug cartels, Russian mobsters, and scammers utilize Chinese black market networks to launder billions in cryptocurrency. TRM Labs reports that these criminal groups rely on sophisticated underground Chinese banking systems for large-scale operations. U.S. policy has not effectively addressed the interconnectedness of these threats, as they all depend on the same illicit banking networks. North Korea's recent $1.4 billion hack of crypto exchange Bybit exemplifies this issue, with Chinese money launderers facilitating the conversion of stolen crypto into fiat. TRM highlights that these informal banks, primarily operated by Chinese triads, enable criminals to access funds in restrictive banking environments. Targeting these laundering networks through sanctions could significantly impact organizations like the Sinaloa Cartel. Despite recent crackdowns by the Chinese government, skepticism remains about their effectiveness. A proposed strategy involves the U.S. developing offensive cyber capabilities to counteract these threats, addressing the lack of coordinated response among U.S. agencies regarding Chinese crypto laundering.
