China busts $295 million underground bank that used crypto to convert foreign currencies

Quick Take

  • Chinese police arrested six suspects allegedly involved in using cryptocurrency to facilitate illegal foreign exchange operations between the Chinese yuan and the South Korean won.
  • The transactions involved amounted to 2.14 billion yuan ($295.8 million), the police said.

China has busted an underground bank that illegally used cryptocurrency to conduct currency exchange operations between the Chinese yuan and the South Korean won — involving at least 2.14 billion yuan ($295.8 million).

The local police published a state media report on Sunday saying that authorities in Northeast China’s Jilin province arrested six suspects who allegedly facilitated the case in China and South Korea.

The police explained that the suspects allegedly exploited features of cryptocurrency, such as anonymity in transactions and decentralization, to conduct foreign currency exchange operations illegally.

The police found that the criminal group used domestic accounts to receive and transfer funds and conducted over-the-counter cryptocurrency transactions. They allegedly assisted companies — such as South Korean purchasing agents, cross-border e-commerce platforms, and import and export trade firms — in currency exchanges between the Chinese yuan and the South Korean won.

Over the years, China has implemented tight capital control policies — leading some to use cryptocurrency to circumvent the rules.


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About Author

Timmy Shen is an Asia editor for The Block. Previously, he wrote about crypto and Web3 for Forkast.News from Taiwan after spending more than three years in Beijing covering finance, entertainment business and current affairs at Caixin Global and Chinese tech at TechNode. His China-related reporting has also appeared in The Guardian. When he's not chasing headlines, you'll find him savoring hot pot and shabu shabu in a Taipei local haunt. Timmy holds an MS degree from Columbia University Graduate School of Journalism. Send tips to [email protected] or get in touch on X/Telegram @timmyhmshen.

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