Opinion by: Slava Demchuk, co-founder and CEO of AMLBot
Asia’s cryptocurrency landscape is facing significant challenges, as over $1.5 billion was lost in the first half of 2025 alone, surpassing all losses of 2024. This includes major scams like Bybit and pig butchering schemes prevalent in Southeast Asia. Traditionally, anti-money laundering (AML) systems have been designed around Western models, which often overlook the unique laundering methods emerging across Asia.
Western Tools, Eastern Loopholes
Globally, AML efforts predominantly focus on mixers, tumblers, and centralized on-ramps common in North America and Europe. However, Asia has developed distinct techniques such as unlicensed OTC desks in Thailand, mobile-money channels in the Philippines, and informal peer-to-peer systems. These methods often evade detection under conventional compliance frameworks.
Wallet clusters and flow patterns are crafted to bypass legacy detection systems, with illicit funds often being discreetly integrated into decentralized exchanges. This allows the laundering process to proceed undetected by typical compliance measures.
Local Problems Need Local Maps
Understanding and combating crime in the Asia-Pacific (APAC) region requires expertise at the jurisdictional level. This includes recognizing strategies like circular trading through Singaporean shell companies or utilizing Indonesian e-wallets for layering transactions. Analytics providers must integrate locally sourced on-chain data and develop dynamic models that adapt to new laundering tactics in real time, rather than relying on post-event analysis.
Creating regional risk libraries is essential. These must identify wallet clusters, known malicious actors, and unique transaction paths, embedding these insights into enforcement mechanisms before scams become public knowledge.
Building Bridges with Law Enforcement
Data alone is insufficient to thwart crime. Many local regulators lack blockchain expertise, and private analytics firms require legal authority to act. Public-private partnerships (PPPs) are crucial in this context, enabling secure data sharing, joint training, and real-time alerts.
Countries like Thailand and Malaysia demonstrate the success of such partnerships. Law enforcement agencies have utilized analytics software to freeze fraudulent funds within hours of reports, a significant improvement from the previous weeks or months. These practical efficiencies are saving millions.
Enforcement Is What Trust and Development Depend On
Crypto participation is rapidly growing in markets like Vietnam, Thailand, and India. However, this expansion is at risk without robust enforcement. Investors need assurance to remain in a market rife with fraud. Public-private collaboration showcases a commitment to consumer protection, enabling collaborative rulemaking and fostering long-term engagement among retail and institutional market players.
Critics point to potential issues with regional compliance, such as varying global standards, on-chain privacy, and government overreach. Privacy-preserving designs, including short-term data retention, permissioned audit trails, and published enforcement reports, can balance user privacy with legal accountability.
Local Expertise Wins
Crypto firms that partner with analytics providers possessing hyperlocal compliance expertise will attract mandates from hedge funds, banks, and custodial institutions investing in the APAC region. Institutions demand confidence in blockchain security and seek vendors with in-depth regional knowledge. Companies relying on generic compliance tools risk losing exchange listings, investor trust, and regional market access.
To advance this model, industry coalitions must work with analytics vendors to co-develop APAC-wide compliance standards. This requires hiring local specialists familiar with underground financial activities and developing jurisdiction-specific risk libraries.
Establishing public-private partnerships with regulators is equally vital, enabling immediate cooperation and enforcement capabilities. The APAC compliance framework should also provide transparency through quarterly reports to evaluate its effectiveness in preventing money laundering across the region.
The Subsequent Surge Relies on Trust
Asia stands at a pivotal moment. Without regionally tailored risk detection and cross-sector collaboration, it risks becoming a “Wild West.” However, with the right foundations, Asia can lead in building a compliant, innovative crypto economy. Engaging with Asia’s financial underground and partnering with local enforcers is key to restoring trust and unlocking future 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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