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Crypto Launderers Shift Tactics, Moving Away from Centralized Exchanges, Chainalysis Reports
A new report from blockchain analysis firm Chainalysis reveals a significant shift in how illicit actors launder cryptocurrency. Launderers are increasingly abandoning centralized exchanges, which have bolstered their security and compliance measures, in favor of informal, service-based networks, particularly those operating through Chinese-language channels. This trend marks a notable evolution in the landscape of crypto-enabled financial crime. Key Takeaways Centralized crypto exchanges are seeing a decline in their use for money laundering. Informal networks, especially those using Chinese-speaking channels, are becoming dominant. These networks leverage money mules, informal OTC desks, and gambling platforms. The on-chain money laundering ecosystem has grown substantially, with billions laundered annually. Law enforcement faces a capability gap and needs to upskill to combat these evolving tactics. The Rise of Informal Networks Chainalysis data indicates that informal service-based networks, often facilitated through Chinese-speaking channels, have become the primary method for laundering illicit funds. These networks offer a diverse range of "laundering-as-a-service" options. They emerged prominently around the start of the COVID-19 pandemic in early 2020 and have since grown to "dominate known crypto money laundering activity." This shift away from centralized exchanges is attributed to increased regulatory scrutiny and enhanced security protocols on these platforms, making it harder for illicit actors to operate. Centralized exchanges can freeze funds, a risk that these informal networks aim to circumvent. Chinese-Language Networks Dominate Illicit Flows Over the past five years, Chainalysis estimates that Chinese-language networks have processed approximately 20% of all tracked illicit crypto funds. In stark contrast to the declining use of centralized exchanges, inflows to these identified Chinese-language networks have grown at an astonishing rate – 7,325 times faster than those directed to centralized exchanges since 2020. While not the sole facilitators of on-chain laundering, these Telegram-based services now account for a disproportionately large share of the global on-chain money laundering landscape. A Growing On-Chain Laundering Ecosystem The overall on-chain money laundering ecosystem has experienced significant expansion. Chainalysis projects that over $82 billion in illicit funds were laundered in 2025, a substantial increase from $10 billion in 2020. The Chinese-language networks alone were responsible for an estimated $16 billion, averaging roughly $44 million per day. This growth is fueled by the increasing accessibility and liquidity of cryptocurrencies, alongside a fundamental change in how and by whom this illicit activity is conducted. Law Enforcement Needs to Adapt Chainalysis emphasizes that law enforcement agencies must adapt their strategies to effectively combat this evolving threat. Disrupting on-chain money laundering requires targeting illicit operators, vendors, and their advertising platforms. Experts highlight a significant "chasm" in capabilities between criminals and law enforcement regarding cryptocurrency use in most countries. While blockchain tracing tools offer assistance, a more comprehensive, global effort is needed. This includes upskilling law enforcement personnel in crypto capabilities and establishing better information-sharing mechanisms worldwide. Sources Crypto launderers are turning away from centralized exchanges: Chainalysis — TradingView News, TradingView. Crypto launderers are turning away from centralized exchanges: Chainalysis, mx.advfn.com. This article was created with support from AI-driven technology, drawing on multiple reputable sources. The final content has been thoroughly reviewed and edited by BlockzHub's editorial team to ensure accuracy, clarity, and coherence. Original reporting sources are credited whenever appropriate and as required. The opinions expressed in this article do not necessarily represent the official views or positions of BlockzHub. This article is intended for informational purposes only and should not be considered financial or professional advice. Investing involves risk, and you should consult a qualified financial advisor before making any investment decisions.
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CrimeMakina Finance Hit by $4.1M Exploit; MEV Bots Intercept Stolen Funds
Decentralized finance (DeFi) protocol Makina Finance has fallen victim to a significant exploit, resulting in the loss of approximately $4.13 million worth of Ethereum. The attack, which saw 1,299 ETH drained in a single transaction, was further complicated by the intervention of a Miner Extractable Value (MEV) builder that front-ran the attacker, capturing a portion of the stolen assets. Key Takeaways Makina Finance experienced a loss of $4.13 million in ETH due to a DeFi exploit. 1,299 ETH were drained in a single transaction. An MEV builder front-ran the attacker, capturing some of the stolen funds. The stolen assets are currently held in two separate wallets, with no further movement detected. Makina Finance has not yet issued an official statement regarding the incident. The Exploit Unfolds The security breach occurred on January 20, 2026, targeting Makina Finance's DUSD/USDC Curve pool. On-chain data indicates the exploit was executed through a large swap on Uniswap V3, where approximately 4.24 million USDC was exchanged for 1,299.18 ETH. The transaction, confirmed on Ethereum block 24,273,362, was completed with a remarkably low gas fee of just over $0.50, suggesting a carefully orchestrated execution. The funds moved through several protocols, including Curve and Aave, before settling on Uniswap. Blockchain data reveals that over $5.1 million in USDC passed through these transactions as part of the swap, with some liquidity routed through Curve's DAI and 3Crv pools. MEV Bots Intervene Adding another layer to the incident, an MEV builder bot identified by the address starting with 0xa6c2 intercepted the stolen ETH shortly after it arrived in the attacker's wallet. This MEV activity, occurring during the block-building stage, suggests the transaction was detected and acted upon before the primary attacker could move the funds further. While the MEV builder captured a small portion, approximately 0.13 ETH, it highlights the increasingly competitive and aggressive nature of trading on the Ethereum network. Current Status of Stolen Funds Following the exploit and the MEV builder's intervention, the stolen ETH remains split between two wallet addresses. One wallet holds approximately $3.3 million, while the other contains roughly $880,000. As of the latest reports, these funds have not been moved, mixed, bridged, or sent to any exchanges, providing a clear on-chain trail for investigators. Makina Finance's Silence Despite the significant financial loss and the public attention drawn by the exploit, Makina Finance has yet to release an official statement. The protocol's team has not acknowledged the incident on social media or provided any clarification on whether user funds were affected or if recovery efforts are underway. This silence is notable given the scale of the hack and the speed at which it occurred. The incident serves as a stark reminder of the persistent vulnerabilities within the DeFi space, even with advanced protocols and security measures. Flash loan attacks continue to be a prevalent method for exploiting liquidity pools, and the involvement of MEV bots adds another complex dimension to on-chain security. Sources Makina Finance Exploit Drains 1,299 ETH in Major DeFi Hack, The Crypto Times. MakinaFi Exploit Drains $4.1M as MEV Bots Front-Run Transactions, Coinfomania. This article was created with support from AI-driven technology, drawing on multiple reputable sources. The final content has been thoroughly reviewed and edited by BlockzHub's editorial team to ensure accuracy, clarity, and coherence. Original reporting sources are credited whenever appropriate and as required. The opinions expressed in this article do not necessarily represent the official views or positions of BlockzHub. This article is intended for informational purposes only and should not be considered financial or professional advice. Investing involves risk, and you should consult a qualified financial advisor before making any investment decisions.
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CrimeTerraform Labs Liquidator Sues Jump Trading for $4 Billion Over Alleged Role in Terra Collapse
The administrator overseeing the liquidation of Terraform Labs has filed a massive $4 billion lawsuit against crypto market maker Jump Trading. The suit alleges that Jump Trading played a direct role in the collapse of the Terra ecosystem, enriching itself through illicit market manipulation and self-dealing, ultimately leading to devastating financial losses for thousands of investors. Key Takeaways Terraform Labs' liquidator, Todd Snyder, is suing Jump Trading for $4 billion. The lawsuit alleges Jump Trading engaged in market manipulation and self-dealing that contributed to Terra's collapse. Secret agreements between Jump Trading and Terraform are cited as evidence. Jump Trading denies the allegations, calling the lawsuit a "desperate attempt" to shift blame. Allegations of Direct Involvement Todd Snyder, the plan administrator for the Terraform bankruptcy, has accused Jump Trading, its co-founder William DiSomma, and former crypto division president Kanav Kariya of directly contributing to the downfall of Do Kwon's company. The lawsuit claims Jump Trading "actively exploited the Terraform Labs ecosystem through manipulation, concealment, and self-dealing that enriched Jump while financially devastating thousands of unsuspecting investors." Secret Agreements and Market Manipulation Court documents reveal that since 2019, secret agreements existed between Jump Trading and Terraform. One such agreement allegedly allowed Jump to purchase LUNA at a significantly reduced price of $0.4 when the market price was as high as $110. Furthermore, Jump Trading is accused of having an informal agreement to artificially support the TerraUSD (UST) stablecoin's peg to the dollar, concealing these actions from regulators and the community. When UST lost its peg in May 2021, Jump Trading allegedly intervened by purchasing UST to restore its value, misleading investors into believing the algorithm was responsible for the recovery. The lawsuit further claims that once the stablecoin's vulnerability was known, Jump Trading secured the removal of vesting periods in contracts, enabling them to sell LUNA monthly and profit, thereby exacerbating pressure on the token. Exploiting the Collapse Following the initial stablecoin failure, the Luna Foundation Guard's Bitcoin reserve was established under the control of Kwon and Kariya. When UST collapsed again in May 2022, nearly 50,000 BTC (approximately $1.5 billion at the time) were transferred from this reserve without clear written agreements. The lawsuit suggests that DiSomma's attempts to salvage the situation by seeking liquidity from other crypto companies backfired, as competitors began selling TerraUSD and Luna upon learning of the project's issues. Jump Trading's Response and Past Settlements A representative for Jump Trading issued a statement calling the lawsuit a "desperate attempt by Terraform Labs to shift blame and financial responsibility from the crimes committed by Do Kwon. We will vigorously defend against these baseless allegations." This legal action follows a separate settlement in December 2024, where Jump's subsidiary, Tai Mo Shan, paid $123 million to resolve claims related to transactions with Terraform in 2021. In 2023, the U.S. Securities and Exchange Commission (SEC) also brought similar accusations, stating Jump Trading earned approximately $1 billion from transactions involving UST. Broader Impact and Legal Ramifications The collapse of TerraUSD and LUNA in May 2022 wiped out an estimated $40 billion in value, triggering a wider market downturn and leading to the failures of several major crypto firms, including Three Arrows Capital. Do Kwon was sentenced to 15 years in prison in December 2025 after pleading guilty to fraud charges. Sources Jump Trading Accused of Direct Involvement in Terra’s Collapse, ForkLog. Jump Trading Sued for $4 Billion Over Terra Collapse, Phemex. Todd Snyder Files $4 Billion Lawsuit Against Jump Trading Amid Crypto Turmoil, Value The Markets. Terraform Liquidators Allege Jump Trading Helped Fuel Crypto’s Biggest Crash: Report, Yahoo Finance. This article was created with support from AI-driven technology, drawing on multiple reputable sources. The final content has been thoroughly reviewed and edited by BlockzHub's editorial team to ensure accuracy, clarity, and coherence. Original reporting sources are credited whenever appropriate and as required. The opinions expressed in this article do not necessarily represent the official views or positions of BlockzHub. This article is intended for informational purposes only and should not be considered financial or professional advice. Investing involves risk, and you should consult a qualified financial advisor before making any investment decisions.
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