Opinion by: Slava Demchuk, co-founder and CEO of AMLBot
Asia’s cryptoverse has lost more than 1.5 billion in the first half of 2025 — more than during 2024, including Bybit and pig butchering scams in Southeast Asia. Most engines are built around typologies of Western money laundering. They miss custom laundering channels tailored to each region, which are popping up across Asia.
Blockchain analytics firms must build customized regional risk libraries and collaborate with local law enforcement to combat the level and caliber of cryptocurrency-enabled crime in Asia. Failure to address this means criminal funds will still be able to lurk in plain sight and subvert the very integrity of global compliance systems.
Western tools, Eastern loopholes
The global risk engine most commonly targets mixers, tumblers and centralized on-ramps in North America and Europe. But the Asian financial underground uses different weapons: unlicensed OTC desks in Thailand, mobile-money corridors in the Philippines, and informal peer-to-peer parking methods that don’t trigger red flags as seen through today’s general compliance lens.
With the corresponding flows, these wallets build the wallet clusters and flow patterns that circumvent legacy detection rules. Proceeds are often left idle or are discreetly layered, before ending up at decentralized exchanges, letting the laundering cycle slip by general compliance triggers.
Local problems need local maps
The ability to effectively monitor crime in APAC is based on jurisdiction-level expertise. That includes mapping typical tactics, such as circular trading via Singaporean shell companies, or layering transactions with Indonesian e-wallets. Analytics providers must ingest locally published onchain data and hold living typologies to mimic real-time laundering innovations rather than wait to reverse engineer them when it’s too late.
Building regional risk libraries — flagging wallet clusters, known bad actors and unique entry/exit ramps — is fundamental. These tools must be built into enforcement engines, not tacked on after a scam becomes newsworthy.
Building bridges with law enforcement
Data alone doesn’t stop crime. Local regulators are typically not well-versed in blockchain, and private analytics companies require legal authority to act. This is where public-private partnerships (PPPs) are crucial. PPPs may formally permit secure data-sharing, joint training and real-time alerts.
Related: North Korea crypto hackers tap ChatGPT, Malaysia road money siphoned: Asia Express
These partnerships are already bearing fruit: In countries like Thailand and Malaysia, law enforcement has used real-time dashboards and analytics software to freeze funds within hours of reported fraud — compared to weeks or months in the past. These are not hypotheticals; they’re operating efficiencies that save millions.
Enforcement is what trust and development depend on
Retail participation in crypto is booming in markets like Vietnam, Thailand and India, but that growth is exposed without enforcement confidence. We must incentivize investors to stay in a market where fraud is rife. Public-private collaboration demonstrates commitment to protecting consumers, allowing for rulemaking that is done in concert, and supporting long-term engagement across the retail and institutional market participants.
There are dangers in regional compliance, say the critics. Different global standards, privacy in onchain, and government overreach are all real issues. Privacy-preserving design — like short-term data retention, permissioned audit trails and the publication of enforcement reports — can protect user privacy and legal accountability.
Local expertise wins
Crypto firms partnering with analytics providers with hyperlocal compliance capabilities will win mandates from hedge funds, banks, and custodian banks investing in the APAC region. Institutions are looking for confidence in blockchain hygiene and proving that the vendors understand the terrain. Vendors dependent upon “one-size-fits-all” compliance tooling risk losing their exchange listing, investor confidence, and regional access.
To push this model, industry coalitions must collaborate with analytics vendors, which will co-develop APAC-wide compliance standards. This undertaking should involve employing local specialists in underground financial activity and the development of jurisdiction-specific risk libraries.
Setting up public-private partnerships with regulators is equally important; they allow immediate cooperation and enforcement rights. The pan-APAC compliance architecture should also include transparency through quarterly impact reports to assess the model’s effectiveness in preventing money laundering across the region.
The subsequent surge relies on trust
Asia stands at a crossroads. Without regionally tailored risk detection and cross-sectoral collaboration, it is in danger of becoming like the “Wild West”. However, with proper underpinnings, it could be a leader in constructing a compliant, innovation-focused crypto economy. Speaking the language of Asia’s financial underground — and partnering with local enforcers — is the only way to regain trust and unlock the next chapter of growth.
Opinion by: Slava Demchuk, co-founder and CEO of AMLBot.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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