December 11, 2023

Law enforcement in the northern Chinese province of Shanxi uncovered a USDT money laundering scheme suspected of exceeding $55 million.

Police have arrested 21 people in connection with the money laundering ring, according to local news reports.

major bust

The money laundering came to light when authorities in Qinshui county observed highly volatile fund flows in a bank account in Zhao’s name. This abnormal flow of funds raised suspicions of money laundering, and the police launched a thorough investigation. According to China National Radio and Television, the investigation revealed startling details of how an organized criminal gang orchestrated an over-the-counter (OTC) trading ring involving USDT since October 2021.

USDT is the world’s largest stablecoin whose value is pegged to the U.S. dollar.its operator is tether limited company

operating mode

Investigators revealed that the suspect traveled across four provinces, bought USDT at a low price through WeChat groups and money laundering platforms, and then sold it at a high price, illegally obtaining huge profits. Authorities said the money laundering operation had completed transactions totaling nearly $55 million during its nearly three-year run.

Authorities located members of the operation in six cities in the provinces of Jiangxi, Henan, Guangxi and Anhui. More than 50 police officers were dispatched to arrest the perpetrators. Along with the arrests, police also seized more than 40 mobile phones, as well as 200,000 yuan ($28,000) in cash and more than 1 million yuan ($140,000) worth of USDT.

suspect confession

The suspects were interrogated by authorities and admitted to the charges against them, local news agencies reported. The charges include facilitating the conversion of Chinese yuan into USDT and helping criminals launder money. However, the case remains open and is still under investigation. According to the authorities, USDT has quickly become the cryptocurrency of choice for money launderers due to the convenience and anonymity it offers.

China’s stance on cryptocurrencies

China has historically taken a tough stance on cryptocurrencies. However, the country’s stance will come as no surprise to longtime observers of the cryptocurrency space. Chinese citizens first heard about cryptocurrencies in 2011, thanks to the centralized exchange Bitcoin China founded by Bobby C. Lee. Bobby C. Lee is the brother of Litecoin founder Charlie Lee. In the early days of Bitcoin, Bitcoin China accounted for a large portion of global Bitcoin trading activity.

Bitcoin quickly became widely accepted in China, with businesses starting to accept it as a form of payment. In 2013, however, China made its first attempt to stifle the country’s cryptocurrency space, with the People’s Bank of China banning banks from holding or trading the digital currency despite bitcoin’s surging adoption. However, Chinese citizens can still buy, send and store cryptocurrencies. During the 2017 bull run, Chinese authorities imposed further sanctions on the cryptocurrency space, banning all platforms offering ICOs (Initial Coin Offerings). Additionally, authorities have forced several exchanges to shut down their operations.

In 2021, Chinese officials banned cryptocurrency mining, effectively crippling the industry in China. The impact on the market was severe, with Bitcoin’s hash rate falling to 50% and its price also falling sharply. In addition to the mining ban, the authorities also banned all cryptocurrency trading and transactions. Additionally, anyone working with a Chinese company related to the cryptocurrency space could face jail time. However, despite all these obstacles, Chinese citizens can still access cryptocurrencies through proxy internet servers and decentralized finance (DeFi) platforms.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.