Chinese police dismantled a fraud gang using USDT for money laundering.
The gang defrauded a local resident of 50,000 yuan using a false government identity.
Over 10 cases across multiple regions, including Beijing and Shanghai, have been linked to the group.
7 suspects arrested, with cash, mobile phones, and a vehicle seized during the operation.
Uncovering the Fraud Network
In early September 2024, the Heshun County Public Security Bureauâs Criminal Investigation Brigade, alongside the Cyber Security Brigade, uncovered a sophisticated scam involving the use of USDT (Tether) for laundering fraudulent funds. The investigation was triggered by a case where a local resident, Zhao Moumou, was swindled out of 50,000 yuan by criminals pretending to be government officials.
The fraudsters cleverly withdrew the money from a bank in Chongqing and used various financial loopholes to disguise their activities. Upon thorough investigation, the police discovered that the criminal gang operated a well-coordinated scheme. Using Telegram to communicate, the suspects sent bank card details of unwitting âcustomersâ to international fraudsters, enabling the transfer of stolen funds into these accounts. The unsuspecting customers were then tricked into thinking they were buying cars and taking out loans, only for their accounts to be used for laundering illicit funds.
Once the stolen funds were in the bank, the criminals would withdraw the cash and swiftly convert it into USDT, a stablecoin known for its anonymity and efficiency in transferring funds across borders. From there, the laundered money was sent overseas, making it more difficult for authorities to track.
Operation to Dismantle the Gang
This investigation was no small task. With over 10 linked cases across major Chinese cities like Beijing, Shanghai, and Anhui, authorities had to track down the criminal network meticulously. Surveillance footage, transaction records, and communication logs were analyzed to understand the gangâs operational structure and identify the individuals responsible for withdrawing the stolen money.
As the police closed in on the suspects, they coordinated a large-scale arrest operation in several locations, including Chongqing and Henan. The result? Seven suspects were arrested, and authorities seized critical evidence, including ten mobile phones, a vehicle, a banknote detector, and over 37,000 yuan in cash.
This operation marks a significant victory for Chinese law enforcement, as the use of cryptocurrencies like USDT in money laundering schemes is becoming increasingly common. By targeting both the individuals involved and the tools they used, authorities were able to disrupt a larger criminal enterprise.
The investigation is ongoing, and authorities are continuing to unravel the full extent of the gangâs operations. With the increasing adoption of digital currencies, law enforcement agencies face growing challenges in combating financial crimes. However, the success of this case highlights their adaptability and determination to crack down on new-age fraudsters.
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