Coinspeaker Digital Yuan Criminals Cashed Out: Gang Sentenced for Money Laundering Scheme
A criminal gang in China used the anonymity of transactions involving China’s digital yuan, also known as e-CNY, to launder money. The Yuecheng District People’s Procuratorate has recently prosecuted some cybercriminals, leading to their prison sentences.
Digital Yuan, which was launched to make financial transactions in China much more convenient, has also opened up new opportunities for cybercrime. The adoption has created a new path for cybercriminals to exploit and conduct malicious acts, owing to the anonymity it provides.
The arrested gang members, Yuan, Zhang, and Kou, were able to cash out more than 200,000 yuan in Shaoxing by targeting merchants who accepted e-CNY payments, enticing them with promises of fees if they agreed to withdraw cash from their digital wallets.
The scheming process could be traced back to 2023, when Yuan, the gang leader, came across a part-time job advertisement. He contacted the job owner, who then offered him a commission of 0.8% if he was able to get a merchant with digital RMB (e-CNY). Yuan was able to get a merchant willing to participate and successfully receive the commission.
As the gang leader grew in the job, he continued to entice merchants with digital RMB by engaging them in shopping and casual conversation. Once the merchant agreed to change the fund into physical cash, he would first convert a portion of his fund as a deposit into digital currency and then transfer it to the upstream supplier, who then provided a fraudulent fund.
After that, he would send the digital RMB payment code to the supplier. Once the illegal fund entered the seller’s digital RMB account, they would deduct a handling fee ranging from 1% to 1.5% before withdrawing the related amount of cash.
Greed Fuels Expansion
Yuan became more greedy in the illicit business, and to secure more funds, he recruited his girlfriend, Zang, and his friend Zou, offering them 50 yuan commission for every 10,000 yuan cashed out. He admitted:
“I didn’t expect the money to come so quickly. It’s still too slow for me to work alone.”
To evade being caught, the gang used encrypted chat apps to contact their upstream suppliers; however, in September 2023, Yuan and his gang members went to the streets of Shaoxing seeking merchants who agreed to receive digital RMB. A few days after their publicity for merchants, security operatives caught them after discovering an unusual flow of funds within the area. This abnormal activity led to the arrest of Yuan and his fellow criminal friends.
Yuan admitted that he was guilty and that he had returned all the stolen money he had acquired. The Yuecheng court sentenced Yuan to one year and four months in prison, while Zhang and Kou received seven months each. All three also paid fines for concealing criminal proceeds.
The prosecutors reminded merchants to remain vigilant about suspicious transaction requests and protect their digital RMB accounts from being abused. The public was also cautioned about disclosing personal information that could enable e-CNY crimes.
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Digital Yuan Criminals Cashed Out: Gang Sentenced for Money Laundering Scheme