Recently, the Qingdao police in Shandong Province uncovered a major underground money laundering case that spread across 17 provinces and municipalities across the country, involving a total amount of RMB 15.8 billion (approximately NT$69.9 billion). They also arrested a banker who cooperated with the underground money laundering firm and engaged in illegal virtual currency trading.
The investigation of the case began in November 2022. Qingdao police found that more than 1,000 accounts of Jin and others were extremely abnormal, with an average daily turnover of more than 3 million yuan and a total transaction amount of more than 2 billion yuan. In addition, large amounts of funds had abnormal characteristics such as high-frequency operations around the clock and fast in and out. What is even more striking is that although these accounts were operated through online banking or mobile banking, the network operation address displayed was overseas, and the account opener did not leave the country.
After investigation, it was found that only Jin's son had been abroad for a long time, and his address was consistent with the network operation address. Most of the people who transferred money to Jin's controlled account had studied abroad or had multiple short-term entry and exit experiences. Jin's related accounts also showed that there were fund transactions with other suspected underground money houses in China. This aroused the suspicion of the police, and they focused their attention on the individual named Jin.
Subsequently, investigators from the State Administration of Foreign Exchange and public security organs launched an investigation and found more than 20 million suspicious bank transaction records related to Jin, with a transaction volume of more than 10 billion yuan. However, the account situation was extremely abnormal. A large amount of Jin's funds were transferred to multiple bank accounts controlled by Li in China, and the funds only went in but not out.
Li was originally an ordinary employee of a county-level textile enterprise, but the capital flow of the third-party bank cards under her name and control reached more than 5 billion yuan, which was obviously inconsistent with her identity. Therefore, an investigation was conducted around her trading counterparts, and it was found that Li's other identity was actually an acceptor who specialized in illegal trading of virtual currencies. Li helped Jin to exchange a large amount of funds into virtual currencies such as Tether through a virtual currency trading platform overseas.
After collecting RMB from "customers", underground banks buy virtual currency and then sell the virtual currency through overseas trading platforms to obtain the foreign currency funds they need. This process realizes the conversion of RMB and foreign currency, which constitutes the illegal act of buying and selling foreign exchange.
The police determined that Jin was suspected of illegal business operations, using the bank account he controlled to provide illegal currency exchange services and conduct transactions with other underground banks in China. After obtaining solid evidence, the case officers launched a crackdown. Qingdao police seized virtual currencies such as USDT and LTC worth about 2 million yuan on the spot. The case has now been transferred to the procuratorate for review and prosecution.
China's State Administration of Foreign Exchange stressed that according to Chinese national regulations, virtual currencies do not have the same legal status as legal tender, and engaging in virtual currency-related businesses is an illegal financial activity. In China, foreign exchange transactions must be conducted at state-designated locations, otherwise they will be considered illegal foreign exchange transactions, and those who commit serious offenses will be held criminally liable.
"If you need to exchange and settle foreign exchange, remember to go to a legal institution that is qualified and approved for foreign exchange settlement and sales. Don't choose to exchange and settle through illegal institutions or individuals for the sake of so-called 'convenience' or 'more suitable exchange rates'," said Zhang Zhaohui, deputy director of the Qingdao branch of the State Administration of Foreign Exchange of China.
The State Administration of Foreign Exchange of China finally stated that it will continue to work closely with the public security organs, the People's Bank of China and other departments to crack down on illegal and criminal activities such as underground banks, promote the improvement of foreign exchange service levels, and provide convenience for enterprises and individuals to conduct foreign exchange business through legal channels.
Summarize
With the development of technology, virtual assets such as virtual currencies have gradually emerged and attracted the attention of a large number of investors. However, it is in this emerging field that some lawless elements have also found opportunities to abuse virtual assets for illegal activities, including money laundering, smuggling, fraud and other financial crimes.
The successful investigation of this case has sent a warning to the public that virtual assets are not beyond the law. The government and law enforcement agencies will continue to intensify their crackdowns and strengthen the supervision and crackdown on financial crimes. Therefore, the public also needs to be vigilant and choose legal and reputable financial institutions when conducting financial transactions, abide by national regulations, and jointly maintain financial order and social security.
