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This paper studies an optimal channel assignment problem for passive monitoring in multi-channel wireless networks, where a set of sniffers capture and analyze the network traffic to monitor the network. The objective of this problem is to maximize the total amount of traffic captured by sniffers by judiciously assigning the radios of sniffers to a set of channels. This problem is NP-hard, with the computational complexity growing exponentially with the number of sniffers. We develop distributed online solutions to this problem for large-scale and dynamic networks. Prior works have attained a constant factor equation of the maximum monitoring coverage in a centralized setting. Our algorithm preserves the same ratio while providing a distributed solution that is amenable to online implementation. Also, our algorithm is cost-effective, in terms of communication and computational overheads, due to the use of only local communication and the adaptation to incremental network changes. We present two operational modes of our algorithm for two types of networks that have different rates of network changes. One is a proactive mode for fast varying networks, while the other is a reactive mode for slowly varying networks. Simulation results demonstrate the effectiveness of the two modes of our algorithm.