Crisis Management for a Conflict with North Korea

經濟學人︰中國地下銀行成最大洗錢網路

Liberty Times Net | Local Language | News | Nov. 25, 2025 | Corporate Corruption or Fraud

China’s underground banks have emerged as the world’s largest money-laundering network, facilitating a wide range of criminal activities including those by Chinese tycoons, drug traffickers, fraud groups, and North Korean hackers. The U.S. Treasury estimates that about $154 billion in illicit funds, primarily from Mexican drug cartels selling drugs in the U.S., is laundered annually through China’s money-laundering networks.

These networks have overtaken traditional laundering services by employing innovative methods and offering significantly lower fees, charging only 1% to 2% compared to the traditional 7% to 10%. Their efficiency and global reach allow them to dominate the illegal market without violent competition. North Korean hackers have also utilized China’s underground banks to launder nearly $100 million daily, following a record $1.5 billion cryptocurrency theft in February.

The success of China’s laundering operations is driven by technological innovation, China’s trade surpluses, and strict capital controls limiting outbound individual transfers to $50,000 annually. This system enables complex three-party transactions where illicit funds are moved out of the U.S., renminbi is moved out of China, and currencies are exchanged globally by trafficking groups.

Money launderers often use a mix of methods. For example, Chen Zhi, a Cambodian businessman originally from China and founder of the Prince Group, used an extensive network involving cryptocurrency mining, online gambling platforms, shell companies, and professional laundering services to mix illicit and legitimate funds, illustrating the sophisticated tactics employed in China’s underground banking system.