Chinese police have just busted a large-scale money laundering ring using stablecoin USDT, with an estimated amount of up to 1.9 billion USD in Chengdu, Sichuan, where USDT is often used to exchange foreign currencies. .
On May 15, Chinese police destroyed a money laundering ring specializing in using USDT, and arrested 93 suspects in 26 provinces and cities and froze 149 million Yuan (equivalent to 20 million USD) related to the above large-scale money laundering activities.
Authorities said this group used multiple bank accounts and cryptocurrency wallets to make anonymous transactions, in order to avoid the supervision of authorities. They attracted customers who wanted to move money abroad to buy real estate, invest, or avoid taxes.
Specifically, the crackdown campaign was launched in November 2022, when Long Tuyen District Police, Cheng Do discovered a group of subjects using an underground money transfer service to pay in an illegal drug trafficking case. .
On June 1, 2023, under the direction of the Ministry of Public Security and Provincial Police, the authorities simultaneously launched an arrest campaign in 6 locations: Shanghai, Truong Sa, Nanjing, Shenzhen, Phuc Chau and Kim Hoa, arrested 25 subjects, including the leaders Lam Mo, Ong Mo and Tran Mo.
Through the search, police confiscated many bank cards, USB tokens and other payment instruments.
Investigation results show that, since January 2021, this group of subjects has taken advantage of import and export activities to conduct illegal foreign exchange transactions through USDT, providing money transfer and payment services to foreign investors. Individuals wishing to transfer money abroad.
Their activities mainly serve the smuggling of cosmetics and pharmaceuticals, purchasing assets abroad, and colluding with other companies to commit tax refund fraud.
By using USDT, the group bypassed foreign exchange authorities, creating an illegal payment channel, causing a great threat to national financial and foreign exchange security.
Furthermore, their money laundering activities also involve many other types of crimes such as financial fraud, corruption, illegal drug trafficking, smuggling of prohibited goods, credit card fraud and tax refund fraud, causing serious problems. seriously affecting the market economic order and financial management.
In August 2023, the project expanded its investigation nationwide, arresting 168 more related subjects in 26 provinces and cities. This is the largest campaign to crack down on money laundering criminals in Sichuan province in recent years.
Even though the government has banned all activities related to cryptocurrency, local people still find ways to avoid this ban. According to a report by Kyros Ventures, the Chinese are now one of the largest groups of stablecoin holders in the world, with 33.3% of investors owning a variety of stablecoins, just behind Vietnam with 58.6%.
The bust is part of a major campaign by the Chinese government to crack down on illegal financial activities and money laundering. Previously, in March, Chinese police also arrested another group of criminals for using cryptocurrency to launder money from online gambling activities.
