Asia Crypto Crime: Localized Security Needed to Stem Losses

Asia's Crypto Crime Wave Demands Localized Security

Asia's cryptocurrency ecosystem is facing a significant challenge: a surge in crypto-related crime. According to AMLBot's co-founder and CEO, Slava Demchuk, the region has already lost over $1.5 billion in the first half of 2025, surpassing the total losses of 2024. This alarming trend underscores the limitations of current Western-centric security measures in addressing the unique money laundering methods prevalent in Asia.

Demchuk emphasizes that blockchain analytics firms must develop customized regional risk libraries and foster collaboration with local law enforcement. Without these tailored strategies, illicit funds will continue to thrive, undermining the integrity of global compliance systems.

Western Tools, Eastern Loopholes

Current global risk engines primarily target mixers, tumblers, and centralized on-ramps common in North America and Europe. However, Asia's financial underground employs different tactics, including:

• Unlicensed OTC desks in Thailand
• Mobile-money corridors in the Philippines
• Informal peer-to-peer parking methods

These methods often bypass standard compliance checks, allowing illicit proceeds to be discreetly layered and eventually transferred to decentralized exchanges.

Local Problems Need Local Maps

Effective crime monitoring in the Asia-Pacific (APAC) region requires jurisdiction-specific expertise. This includes understanding tactics like circular trading through Singaporean shell companies and layering transactions with Indonesian e-wallets. Analytics providers must integrate locally sourced onchain data and maintain up-to-date typologies to mirror real-time laundering innovations.

Building regional risk libraries, which flag suspicious wallet clusters, known bad actors, and unique entry/exit points, is crucial. These tools should be integrated into enforcement engines proactively, not as an afterthought.

Building Bridges with Law Enforcement

Data alone is insufficient to combat crime. Local regulators often lack expertise in blockchain, and private analytics firms require legal authority to act. Public-private partnerships (PPPs) are essential to bridge this gap. PPPs can facilitate secure data-sharing, joint training, and real-time alerts.

Examples of successful PPPs include collaborations in Thailand and Malaysia, where law enforcement has used real-time dashboards and analytics software to freeze funds within hours of reported fraud, saving millions.

Enforcement and Retail Participation

Retail participation in crypto is increasing in markets like Vietnam, Thailand, and India. However, this growth is vulnerable without robust enforcement mechanisms. Public-private collaboration demonstrates a commitment to consumer protection, enabling informed rulemaking and fostering long-term engagement across retail and institutional markets.

While concerns exist regarding regional compliance, such as varying global standards, onchain privacy, and government overreach, these can be addressed through privacy-preserving designs, including short-term data retention, permissioned audit trails, and the publication of enforcement reports.

Local Expertise Wins

Crypto firms that partner with analytics providers possessing hyperlocal compliance capabilities will gain a competitive advantage when seeking mandates from hedge funds, banks, and custodian banks investing in the APAC region. Institutions prioritize blockchain hygiene and demonstrable understanding of the local terrain.

Industry coalitions must collaborate with analytics vendors to co-develop APAC-wide compliance standards, employing local specialists in underground financial activity and building jurisdiction-specific risk libraries.

Establishing public-private partnerships with regulators is also essential for immediate cooperation and enforcement rights. Transparency should be maintained through quarterly impact reports that assess the model's effectiveness in preventing money laundering across the region.

The Subsequent Surge Relies on Trust

Asia is at a critical juncture. Without regionally tailored risk detection and cross-sectoral collaboration, it risks becoming a “Wild West.” However, with the right foundations, it can become a leader in building a compliant and innovation-focused crypto economy. Understanding the nuances of Asia's financial underground and partnering with local enforcers is the key to regaining trust and unlocking the next phase of growth.