On Tuesday, Chinese officials announced the shutdown of a major illegal banking network that processed at least $1.9 billion in transactions using the cryptocurrency Tether (USDT). Officials from Sichuan and Chongqing announced the arrest of 193 suspects across 26 provinces linked to this network.
The criminal group reportedly utilized USDT to bypass China’s stringent foreign exchange controls, facilitating the transfer of criminal proceeds abroad. The transactions involved amounted to 13.8 billion yuan ($1.9 billion).
As part of the crackdown, law enforcement destroyed two key operational ‘dens’ located in Fujian and Hunan in 2023 and frozen assets worth 149 million yuan ($20.6 million).
Authorities have charged the network with a range of offenses, including financial fraud, job-related crimes, and various smuggling activities. Notably, the network was involved in gold-smuggling operations in Nepal.
This case highlights the ongoing challenges faced by China in enforcing capital control measures. Some have turned to cryptocurrencies like USDT to skirt these regulations. The lead suspects, identified only by their surnames, Lin, Weng, and Chen, began their illegal currency exchange activities in January 2021.
