A sweeping international investigation has revealed how cryptocurrency has become a powerful tool for criminal organizations, providing a fast-moving and opaque financial channel that spans borders.

The findings come from the International Consortium of Investigative Journalists, a well-known global reporting network whose past work has included the landmark Panama Papers and other revelations of hidden financial systems.

In its latest project, the group has spent months dissecting the methods used by human traffickers, drug cartels, hacking groups, and other criminal networks to exploit digital assets.

The resulting reports paint a detailed picture of a parallel financial ecosystem that enables illicit activity with remarkable ease.

A Broad Investigation with Global Reach

The investigation, titled “Coin Laundry,” brought together more than one hundred journalists working in over thirty-five countries. The network partnered with major media outlets, including The New York Times, Le Monde, The Toronto Star, Malaysiakini, The Indian Express, and the Australian Financial Review.

Their reporting efforts centered on thousands of documents, extensive blockchain analysis, and interviews with analysts, academics, and law enforcement specialists.

Together, they uncovered a vast infrastructure that uses cryptocurrency to move illegal funds quickly and discreetly.

The team tracked the flows of digital money through many of the largest cryptocurrency exchanges, including Binance, OKX, Coinbase, Kraken, Bybit, and Kucoin.

These platforms handle enormous trading volume every day and serve as crucial gateways for both legitimate investors and bad actors.

According to the investigation, criminals have taken advantage of the industry’s rapid growth, global scale, and often inconsistent regulation to build what amounts to an underground financial network.

Criminal Activity Hidden Behind Digital Transactions

The findings indicate a wide range of illicit groups utilizing cryptocurrency transactions to manage their finances. North Korean state-backed hackers, who have carried out some of the most destructive cyberattacks of the past decade, were identified as major users of these channels.

Chinese and Russian gangs involved in human trafficking and cybercrime were also connected to significant amounts of digital asset movement. The reports further link crypto flows to fentanyl distribution networks, Mexico’s Sinaloa cartel, and other drug trafficking groups.

In some cases, the operations were surprisingly visible.

The investigation uncovered numerous instances of storefronts masquerading as legitimate currency exchange services, particularly in regions such as Ukraine and Dubai.

These businesses allowed criminals to convert digital assets back into cash with minimal scrutiny.

The system enabled transactions that once required physical cash drops or complicated smuggling arrangements to instead take place in seconds through stablecoins or other digital tokens.

One expert interviewed by the consortium described how easy it has become for a drug trafficking operation to move profits using dollar-linked stablecoins.

In the past, couriers would transport large bundles of cash hidden in vehicles.

Now, the process involves a simple transfer from one wallet to another, leaving behind only a trail of blockchain data that is difficult to unravel without specialized tools and expertise.

A Growing Shadow Financial System

The consortium argues that the rise of digital currencies has inadvertently created a financial layer that is both global in reach and difficult for regulators to control. They describe the resulting system as faster and more obscure than traditional money laundering networks.

Transactions can be completed around the clock, across continents, and often without the identity checks common in banking. Blockchain technology provides transparency in theory, but in practice, it requires significant analytical resources to trace funds.

Many criminal groups employ techniques designed to obscure the origin of their money.

Gerard Ryle, the consortium’s executive director, emphasized that the problem is not isolated to a few bad actors. He suggested that the same forces that make offshore banking attractive to wealthy individuals now drive the criminal exploitation of crypto markets.

For decades, investigative reporting has exposed how hidden financial structures facilitate the movement of illicit money offshore. Today, he argues, the same system is emerging inside digital currency markets on a much faster timeline.

Ryle raised serious questions about the obligations of major crypto exchanges. He asked whether some platforms may have been slow to improve compliance or did not fully understand the scale of illicit activity flowing through their services. He also expressed concern that regulators are falling behind as the technology evolves and criminal groups quickly shift their tactics.

How Criminals Evade Detection

While the larger exchanges now employ compliance teams and work with blockchain analytics companies, the reports suggest that criminals continue to find gaps in monitoring tools.

Some of the techniques highlighted include using multiple wallets to obscure transactions, relying on privacy-enhancing services, and moving funds between trading platforms before withdrawing them as cash.

The consortium’s investigators relied on a combination of data sources, including small independent blockchain analysts, some of whom specialize in tracing obscure wallet activity. Their analysis revealed repeating patterns in illicit transactions.

For instance, many of the funds tied to human trafficking or drug operations would pass through well-known exchanges before being distributed to smaller regional platforms.

From there, the money often moved to in-person conversion points where it could be exchanged for local currency.

The reports also noted that the crypto industry remains fragmented. Exchanges in some countries follow strict compliance guidelines while others apply looser standards, making it easier for criminals to choose favorable jurisdictions.

This patchwork of regulation complicates enforcement and helps sustain the shadow system uncovered by the investigation.

Industry Response and Questions Ahead

Following the release of the investigation, journalists contacted several of the large exchanges mentioned in the reports. OKX responded by stating that it takes concerns about illicit activity seriously and welcomes outside examination of its processes.

A spokesperson noted that the company collaborates closely with law enforcement in numerous countries and has established a comprehensive multilayered compliance program.

The program features experienced staff, proprietary monitoring systems that utilize artificial intelligence, and partnerships with blockchain analytics firms, such as Chainalysis. The spokesperson added that suspicious activity is regularly restricted, frozen, or referred to authorities.

Other exchanges declined to give immediate responses. The lack of uniform engagement reflects the ongoing tension between privacy, innovation, and regulatory compliance within the crypto world.

As digital currencies become increasingly integrated with global finance, exchanges face growing pressure to demonstrate that their platforms are not being used to support illicit operations.

A Moment of Reckoning for Digital Finance

The Coin Laundry series arrives at a pivotal moment for the cryptocurrency industry. The sector has battled market volatility, regulatory scrutiny, and skepticism from traditional financial institutions.

This latest investigation adds another layer of complexity by suggesting that criminal exploitation of crypto is more organized and widespread than many industry leaders have acknowledged.

For regulators, the reports highlight the need to coordinate across borders and adopt more sophisticated monitoring tools. Although blockchain transactions are recorded publicly, tracing them at scale requires advanced analytics and collaboration between governments and private firms.

Many experts believe that enforcement efforts must accelerate to keep pace with criminals who quickly adapt to new financial technologies.

For the public, the investigation offers a rare glimpse behind the scenes of a vast, largely unseen financial network. While legitimate uses of cryptocurrency continue to expand, the consortium’s findings show how the same features that attract investors, such as speed and global reach, also provide powerful advantages for illicit groups.

The crypto sector has long promised a more open and decentralized financial system. The challenge now is to ensure that the same openness does not make it a haven for criminal economies. The consortium’s investigation suggests that without stronger oversight and greater transparency, digital assets risk becoming entrenched in the kind of hidden financial structures that have fueled wrongdoing for decades.