by The United States is working hard to establish itself as a global center for cryptocurrency innovation. A new national initiative encourages blockchain development, digital-asset adoption, and crypto-based financial tools. Banks, major retailers, and tech companies now highlight the safety and simplicity of their crypto services. For many businesses, digital assets are no longer experimental—they are becoming part of everyday operations.
However, while the industry is gaining mainstream recognition, a major international investigation has revealed a troubling truth behind the rise of crypto.
A year-long collaboration between the International Consortium of Investigative Journalists (ICIJ), The New York Times, and more than 30 global news organizations found that over $28 billion in illicit funds entered cryptocurrency exchanges in just two years. These funds are connected to hacking groups, cybercriminal organizations, online fraud syndicates, and money-laundering networks that operate across Asia, Europe, and North America.
In other words, even as crypto becomes more common and accepted, it continues to be exploited on a massive scale.
How Illegal Money Reaches Major Crypto Platforms
The investigative report shows that some of the world’s largest crypto exchanges have repeatedly received funds tied to criminal activity. These platforms allow users to exchange traditional currencies—such as dollars or euros—for popular cryptocurrencies like bitcoin and ethereum. But their global reach and digital structure also make them appealing tools for criminals.
The report found that one of the world’s top exchanges received billions in questionable deposits linked to cybercrime networks. At least eight other major exchanges were also found to have processed large amounts of suspicious funds.
A co-founder of a blockchain investigation firm said the pace of illegal activity far exceeds the ability of law enforcement to respond. “There is simply too much happening too fast,” she explained. “Without stronger systems in place, the situation will get worse.”
From Early Dark-Web Use to a Mainstream Industry
In the early days of cryptocurrency, it quickly became a favorite tool for criminals. The anonymity and speed of digital transactions made it ideal for paying for illegal goods and services on the dark web. Bitcoin, especially, played a major role in early online drug markets.
Today, however, the industry is vastly different. It is more professional, more regulated, and more widely used. Billions of dollars in legitimate transactions take place daily. Many exchanges publicly claim they are committed to preventing money laundering and detecting fraud.
Despite these promises, the global regulatory environment has softened. A specialized government task force dedicated to crypto crime was dissolved, and prosecutors were directed to focus more on dangerous criminals rather than on exchanges that allow illegal activity to pass through their platforms. Experts say these changes significantly weakened the ability to hold crypto companies accountable.
The Investigation’s Key Findings
Because all crypto transactions are recorded on public ledgers, investigators were able to follow digital money as it moved between wallets and into exchanges. Using data from forensic firms and public records, the investigation uncovered major patterns, including:
1. Over $400 Million Linked to a Cambodian Financial Group
A large financial group in Cambodia—previously sanctioned for enabling cybercrime and online fraud—sent over $400 million to one major exchange in just one year. Even after U.S. authorities cut the group off from the American banking system, its crypto transfers continued.
2. $220 Million Sent to Another Exchange Shortly After Its Settlement
Just months after the exchange reached a multimillion-dollar settlement with U.S. regulators, it received over $220 million from wallets associated with the same Cambodian group.
3. Scam Victims’ Money Still Lands on Major Platforms
Chain-analysis data shows that in 2024 alone, global exchanges received more than $4 billion connected to scams. Journalists interviewed 24 victims whose stolen funds eventually ended up on major platforms.
4. Physical Cash-Out Shops Moving Over $500 Million
Brick-and-mortar crypto-for-cash stores—common in Eastern Europe, Hong Kong, and the Middle East—moved over $500 million into major exchanges last year. These shops often require no ID, making them perfect for laundering.
Exchanges Defend Their Practices
A spokesperson for one leading exchange said the company has responded to more than 240,000 requests from law enforcement since 2017, including 65,000 in the last year alone. Another exchange stated that it routinely cooperates with authorities and has strengthened its transaction-monitoring systems.
Some companies emphasized their “zero-tolerance policy” for illegal finance. Others did not respond to requests for comment.
However, experts point out that exchanges profit from transaction volume. As one academic researcher noted, “If platforms remove all criminal activity, they lose a major share of their revenue. Some exchanges have financial incentives to look the other way.”
A Multi-Layered Criminal Network Behind the Scenes
One of the most concerning findings involves a large Southeast Asian financial conglomerate with extensive operations in banking, payments, and mobile apps. Although it appears legitimate, investigators discovered that it also runs a hidden online marketplace used by criminals.
On this underground platform, vendors buy and sell:
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stolen personal data
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scam services
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money-laundering tools
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technical support fraud services
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financial transfers for hacking groups
Experts described the platform as an “Amazon for criminal activity.” Despite being sanctioned, the group’s crypto wallets continued sending millions to major exchanges for months afterward.
A Record-Breaking Digital Theft and Its Aftermath
In one of the largest crypto hacks in history, an international hacking group stole more than $1.5 billion in digital currency from an online platform. Within days, the stolen funds were converted from ethereum into bitcoin.
Around the same time, five large deposit accounts at a major exchange received nearly $900 million of ethereum from the hackers’ pathway. Crypto analysts believe the deposits were too large and too unusual to ignore.
One blockchain expert said, “Even basic monitoring tools should have caught this. The timing makes it clear where the funds came from.”
The exchange did not confirm whether it identified the deposits as suspicious.
A Growing Wave of Scams Hurting Ordinary People
Cybercrime does not only affect large platforms. Everyday people are increasingly falling victim to sophisticated investment scams.
One victim, a father from the U.S. Midwest, believed he was working with a financial advisory service. After months of communication, he invested heavily in what he thought was a legitimate crypto opportunity. Instead, he lost $1.5 million—money that investigators later traced to major exchanges.
Many scams follow the same pattern:
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Scammers build trust through friendly or romantic conversations.
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They present a “special investment opportunity.”
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Victims are encouraged to deposit more and more money.
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The platform eventually disappears, and funds cannot be recovered.
Last year alone, crypto investment scams caused $5.8 billion in losses.
Crypto Cash-Out Shops: The Hidden Pipeline
Across Ukraine, Poland, Hong Kong, and the United Arab Emirates, small crypto-exchange storefronts quietly help convert digital assets into cash. These shops often operate behind unmarked doors or inside ordinary businesses.
A journalist from the investigation tested one in Kyiv. After transferring $1,200 in crypto through Telegram, he was handed cash within minutes—no ID, no paperwork, and no digital trail. After the transaction, the shop deleted the chat.
Data from multiple shops shows that their wallets frequently receive funds from major exchanges, meaning customers typically move money from online platforms into these shops to cash out anonymously.
Experts warn that these shops give criminals “endless room” to hide or move illicit funds.
