Without targeted local risk detection and strong public-private partnerships, illicit crypto capital in Asia will continue to circulate unchecked, risking trust in the entire blockchain ecosystem.
Opinion by Slava Demchuk, AMLBot Co-founder and CEO
In the first half of 2025, Asia’s crypto sector suffered losses exceeding $1.5 billion, surpassing all incidents in 2024. Scams like the Bybit hack and pig butchering schemes in Southeast Asia have contributed heavily to this surge. Most security engines rely on Western money laundering patterns, overlooking region-specific laundering channels emerging throughout Asia.
To effectively combat the sophisticated and localized forms of crypto-enabled crimes in Asia, blockchain analytics firms must create bespoke regional risk libraries and closely collaborate with local law enforcement agencies. Neglecting this focus allows criminal funds to remain visible and compromises the integrity of global compliance frameworks.
Western Tools, Eastern Loopholes
Common global risk detection focuses on mixers, tumblers, and centralized on-ramps primarily in North America and Europe. However, Asia’s underground financial systems exploit distinct methods including unlicensed OTC desks in Thailand, mobile money corridors in the Philippines, and informal peer-to-peer transactions that evade conventional compliance triggers.
These illicit transactions form wallet clusters and flow patterns that bypass outdated detection rules. Often, funds are held inactive or subtly layered before reaching decentralized exchanges, allowing laundering activities to bypass compliance audits.
Tailored Approaches for Local Challenges
Effective monitoring in the Asia-Pacific region requires deep local knowledge. This includes mapping typical practices like circular trading via shell companies in Singapore or transactional layering using Indonesian e-wallets. Analytics providers must incorporate real-time onchain data and maintain evolving typologies to anticipate laundering innovations proactively.
Developing detailed regional risk libraries that identify suspicious wallet clusters, known fraudulent actors, and unique entry and exit channels is crucial. These tools should be integral to enforcement platforms, rather than retrofitted after major incidents become public.
Partnerships with Law Enforcement
Data availability alone does not prevent crime. Many local regulators lack blockchain expertise, and analytics firms require legal permissions to operate effectively. Public-private partnerships (PPPs) provide necessary frameworks for secure data-sharing, joint training, and real-time fraud alerts.
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These collaborations have produced tangible results. In Thailand and Malaysia, law enforcement utilized real-time dashboards and analytics to freeze fraudulent funds within hours—significantly faster than previous delays lasting weeks or months. Such efficiencies protect millions from fraud losses.
Enforcement: The Foundation of Trust and Growth
Markets like Vietnam, Thailand, and India experience growing retail crypto adoption, but this momentum is at risk without trusted enforcement. Investor confidence hinges on visible measures combating fraud. Joint efforts between public and private sectors show strong consumer protection while fostering coordinated rulemaking and sustained engagement by market participants.
Some raise concerns about regional compliance complexities, including differing standards, onchain privacy, and potential government overreach. Implementing privacy-focused designs, such as short-term data retention, permissioned audit trails, and public enforcement reporting, can uphold user privacy alongside accountability.
Local Expertise Is Key to Success
Crypto businesses working with analytics providers that have in-depth, hyperlocal knowledge will gain institutional mandates from hedge funds and banks investing in APAC. Such partnerships build credibility by demonstrating mastery of regional risks, unlike generic compliance solutions which risk losing exchange listings and investor trust.
Industry coalitions should collaborate with analytics firms to establish APAC-wide compliance standards, promote the hiring of experts in underground finance, and develop jurisdiction-specific risk databases. Setting up public-private partnerships with regulators also enables swift cooperation and enforcement capabilities. Transparency must be supported through regular impact reports evaluating anti-money laundering success across the region.
Building Asia’s Crypto Future on Trust
Asia faces a pivotal moment. Without regionally tailored risk detection and cross-sector collaboration, it risks descending into a chaotic environment. Conversely, embracing localized intelligence and law enforcement partnerships positions the region as a pioneer in building a compliant and innovation-driven crypto economy. Understanding local financial ecosystems is essential to restoring trust and unlocking sustainable growth.
Opinion by Slava Demchuk, co-founder and CEO of AMLBot.
This article provides general information only and does not constitute legal or investment advice. The opinions expressed are solely those of the author and do not necessarily represent Coinstelegram’s views.
