The Coin Laundry Exposed: A Global Crypto Money-Laundering Crackdown

The international investigation titled “The Coin Laundry”—conducted jointly by the International Consortium of Investigative Journalists (ICIJ) and Le Monde—has exposed one of the most alarming realities in today’s financial crime landscape: cryptocurrencies are increasingly being used to launder massive volumes of illicit proceeds across borders.
Source: Le Monde
Source: ICIJ

As a crypto lawyer, this report highlights not only systemic weaknesses in global crypto compliance but also the urgent need for coordinated regulatory enforcement.

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A Global Web of Crypto-Based Laundering

According to the investigation, criminal networks rely on digital assets to move funds quickly, anonymously, and without traditional banking oversight. This includes proceeds from:

• Online fraud
• Drug trafficking
• Human exploitation
• Cyberattacks and ransomware
• Underground gambling networks

What makes The Coin Laundry investigation significant is its evidence of organized, large-scale crypto laundering pipelines spanning Europe, Asia, the Middle East, and the Americas.

Full report: Le Monde Investigation

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Crypto Exchanges Flouting KYC/AML Requirements

Investigators identified multiple platforms—particularly in loosely regulated jurisdictions—that allegedly ignored or circumvented KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures.

Key findings include:

• Exchanges onboarding clients without identity verification
• Shell accounts used to move millions in crypto
• Weak transaction monitoring
• Failure to flag suspicious wallet activity

These practices violate global standards under FATF (Financial Action Task Force) guidelines, EU AML directives, and U.S. FinCEN regulations.

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High-Risk Laundering Channels Identified

Le Monde’s analysis highlights three major laundering mechanisms that are fueling this shadow economy:

1. Crypto ATMs in Unregulated Locations

These machines allow cash-to-crypto conversion with minimal oversight. In some countries, no ID verification is required, enabling criminals to:

• Deposit illicit cash
• Convert to Bitcoin or stablecoins
• Transfer funds across borders instantly

More details: Le Monde Crypto ATM Findings

2. Crypto Mixers and Tumblers

Mixers blend thousands of transactions together to obscure the origin of funds. Criminals use them to:

• Break traceability
• Hide stolen crypto
• Evade detection by blockchain analytics tools

Some mixers previously sanctioned by OFAC were cited as part of larger laundering networks.

3. Weak Enforcement in High-Risk Jurisdictions

Countries with limited crypto laws or under-resourced regulators struggle to enforce AML rules. This creates safe havens for:

• Routers moving funds between dozens of exchanges
• OTC brokers facilitating anonymous trades
• Layering transactions to complicate tracking

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Legal Implications and Regulatory Challenges

From a crypto-law perspective, The Coin Laundry exposé has profound consequences:

1. Increased Cross-Border Investigations

Law enforcement agencies such as Europol, Interpol, U.S. Treasury, and regional FIUs may initiate joint operations to track laundering networks.

2. Higher Scrutiny for Exchanges

Exchanges failing to enforce KYC/AML could face:

• Civil penalties
• Asset freezes
• License suspensions
• Criminal investigations

3. Need for Unified Global Crypto Regulation

The report underscores gaps between jurisdictions:

• The EU is rolling out MiCA and AMLD6
• The U.S. relies on SEC + FinCEN + CFTC patchwork
• Many countries still lack crypto-specific legislation

This inconsistency creates exploitable vulnerabilities.

4. Enhanced Blockchain Forensics

Regulators will rely more heavily on:

• Chain-analysis tools
• Wallet tracing
• Pattern recognition
• On-chain identity signatures

These technologies can uncover laundering schemes even when mixers are used.

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Conclusion: Crypto Is Not the Problem—Weak Compliance Is

The Coin Laundry investigation does not conclude that crypto itself is inherently criminal. Instead, it exposes:

• Gaps in regulation
• Failures of certain exchanges
• Misuse by organized crime

For legitimate crypto businesses, this is a turning point. Strengthening AML controls, improving KYC procedures, and maintaining transparent operations are essential—not only for legal compliance but for building long-term trust in the digital asset ecosystem.