Displacement and Adaptation: The Evolution of Crowdsourced Money Laundering from Chinese Banks to Offshore Crypto

This study investigates the evolutionary trajectory of “Pao Fen” (running points), a distinct form of crowdsourced money laundering originating in China. Through a comparative case study of two representative platforms—the domestic, bank‑centric “Tian Tian Xiang Shang” (TTXS) and the Cambodian‑based, crypto‑native “Huione Guarantee”—this study analyzes how aggressive enforcement strategies drive structural innovation in criminal markets. Drawing on Chinese judicial documents, open‑source blockchain intelligence, and Chinese‑language criminological literature, it contrasts the operational architectures of both models. It finds that the PRC’s “Duan Ka” (Card Breaking) campaign functioned as a selection pressure that displaced laundering activities offshore and accelerated the transition from bank‑based “mule” networks to cryptocurrency‑based Crime‑as‑a‑Service (CaaS) ecosystems. The paper details the shift from vulnerable, vertically integrated platforms (TTXS) to resilient, decentralised marketplaces (Huione) and examines the emergence of freeze‑resistant stablecoins (USDH) as a countermeasure against asset seizure. The findings suggest that while domestic enforcement effectively suppresses bank‑centric money laundering, it inadvertently catalyses the development of more sophisticated, technologically resilient global laundering infrastructures.