China busts $1.9 billion underground banking operation using USDT
Quick Take
- Police in China have busted an underground bank that conducted foreign currency exchanges using USDT.
- The operation involved transactions worth about 13.8 billion yuan ($1.9 billion).
Police in Southeast China’s Sichuan province have dismantled an underground bank that used the USDT stablecoin for foreign currency exchanges, involving transactions worth at least 13.8 billion yuan ($1.9 billion).
The police in Chengdu city posted a state media report on Thursday, saying that the criminal group mainly served those who sought to smuggle medicine and cosmetics or those who looked to purchase assets overseas.
A total of 193 suspects have been arrested nationwide in connection with this case, with authorities freezing assets valued at 149 million yuan, according to the report. Underground banking involves transferring money using informal methods instead of official channels.
The criminal group, led by individuals with the surnames Lin, Weng, and Chen, reportedly used USDT stablecoin to facilitate illegal currency exchanges starting in January 2021.
This bust follows a separate case in Jilin province where another underground bank involving $295 million was uncovered, also utilizing cryptocurrency for currency conversions.
Over the years, China has implemented tight capital control policies — leading some to use cryptocurrency to circumvent the rules.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
