Illicit financial activities in cryptocurrency transaction networks are becoming increasingly sophisticated, often involving multi-hop and high-order transaction paths that obscure their origins and complicate detection. Traditional rule-based or machine learning methods typically rely on static features and limited local structures, making them insufficient for uncovering deeply embedded anomalous behaviors. Graph Neural Networks (GNNs) have recently shown promise in modeling such relational data; however, most existing GNN-based approaches struggle to effectively capture high-order dependencies and often lack interpretability, which is critical in financial security applications. To address these challenges, this study proposes an explainable graph neural network framework for illicit transaction detection. The framework is built upon the Topology Adaptive Graph Convolutional Network (TAGCN), which allows flexible integration of higher-order neighborhood information to capture complex propagation patterns within transaction graphs. We have evaluated the model using the publicly available Elliptic dataset. Experimental results demonstrate that our method achieves an accuracy of 98.14%, a recall of 86.22%, a precision of 94.23%, an F1-score of 90.05%, and a Matthews correlation coefficient (MCC) of 0.8913, outperforming several baseline models. Furthermore, SHapley Additive exPlanations (SHAP) are employed to provide post hoc interpretability, offering transparent insights into model predictions and enhancing trustworthiness for regulatory decision-making. The proposed framework not only significantly improves detection performance but also enhances model transparency through interpretability, providing important theoretical value and practical potential for anti-money laundering and financial risk management applications.