China Cracks Down on $1.9 Billion Underground Bank Using Cryptocurrency for Illegal Transactions
Chinese authorities recently dismantled a sophisticated underground banking operation in Sichuan province that conducted foreign exchange transactions using the cryptocurrency USDT (Tether). The illegal operation reportedly handled transactions valued at over 13.8 billion yuan (approximately $1.9 billion USD).
The Chengdu police, who announced the crackdown through state media, identified the criminal group as providing services primarily to individuals engaged in smuggling pharmaceuticals and cosmetics, as well as those looking to purchase assets overseas.
The crackdown led to the arrest of 193 individuals linked to the case, and authorities froze assets worth 149 million yuan. Underground banking refers to the transfer of funds using unofficial channels rather than through authorized financial institutions.
Starting from January 2021, the criminal syndicate, led by individuals with the surnames Lin, Weng, and Chen, facilitated illegal currency exchanges using the USDT stablecoin, providing an easy way for clients to circumvent regulatory scrutiny and move large sums across borders.
