The International Consortium of Investigative Journalists (ICIJ) published the investigation Coin Laundry, which exposes a global network of crypto to cash services and exchanges involved in large scale money laundering. The report documents flows worth billions that impact victims of scams, ransomware and organized crime, revealing systemic vulnerabilities. Coin Laundry frames a chain of operations that bypass AML and KYC controls, creating significant operational and reputational risks for major exchange platforms and prompting heightened industry scrutiny.
The investigation details how crypto to cash offices and conversion services function as a parallel banking system that instantly converts digital assets into cash without identification. A crypto to cash desk enables off ramp transactions outside traditional financial channels, typically using encrypted messaging and physical pickups. These mechanisms bypass conventional compliance controls, reinforcing their value for illicit actors.
Parallel Systems and Attribution Barriers
The pseudonymous nature of wallets, represented by alphanumeric blockchain addresses that do not reveal ownership, complicates attribution efforts. Pseudonymous wallets combined with non identified conversion points hinder criminal tracing, limiting recovery options for victims. This structural opacity reduces the effectiveness of traditional mitigation strategies, even for advanced investigative teams.
The reports highlight concrete cases that reflect the scale and mechanisms of the system. Cash desks in Hong Kong moved at least 2.5 billion dollars in a single year, while the Ukraine based platform 001k.exchange allegedly received more than 14.8 billion dollars since August 2022 and routed hundreds of millions to centralized exchanges. Outflows linked to 001k.exchange included more than 400 million dollars to Binance, 54 million to OKX, 13 million to Kraken and 1.1 billion to WhiteBIT, mapping direct touchpoints with top tier platforms. A wallet tied to a desk in Armenia accumulated over 160 million dollars in Tether and received 2.1 million from Kraken in July 2024. Meanwhile, the Huione group in Cambodia reportedly sent about 1 million dollars per day to Binance, illustrating the frequency and scale of these operations.
Investigators compiled technical and judicial statements underscoring the severity of the findings. Cybercrime researcher Richard Sanders characterizes the proliferation as a money laundering nightmare and warns of systemic threats. Nick Smart from Crystal Intelligence calls the flows staggering, noting the operational ease of these exchange points. Gerard Ryle, ICIJ’s CEO, asserts that technology has enabled an opaque financial system, one that surpasses current regulatory and compliance capacity and requires coordinated global action.
The exposé outlines clear consequences for both the crypto ecosystem and traditional institutions. Exchanges receiving funds from these networks face compliance risk and possible sanctions, with substantial reputational and operational impact. It also describes the declining effectiveness of on chain analysis tools, as rapid address rotation and shifting sending schemes create dead ends for investigators. Economic incentives that reward premium cash payouts serve as indicators of laundering oriented networks, while regulatory fragmentation facilitates jurisdictional arbitrage exploited by illicit actors.
Key takeaways emphasize the magnitude and implications of the system: documented flows reach billions and intersect with leading exchanges; the mix of pseudonymous wallets and KYC free off ramp services leads to irreversible victim losses; and current forensic tools face structural limits as address rotation accelerates. These combined factors restrict enforcement and asset recovery, even in high profile investigations.
The investigation concludes with a call for stronger international regulatory coordination and enhanced AML and KYC controls for crypto to cash conversion points. The next phase will depend on how regulators and platforms respond to these revelations, which will shape the future integrity of the digital assets market.
