- Chinese police dismantle a $1.9 billion underground banking scheme involving the stablecoin Tether (USDT).
- The operation, centered in Chengdu, facilitated the exchange of foreign currencies using USDT.
- 193 suspects across 26 provinces were apprehended in connection with the illicit activity.
- The underground banking network, active since January 2021, primarily trafficked medicine, cosmetics, and investment assets overseas.
- Authorities shut down operations in Fujian and Hunan, seizing 149 million yuan ($20 million) tied to the illicit transactions.
- Despite China’s strict crypto regulations, traders continue to exploit cryptocurrencies, with a significant percentage involved in stablecoin trading.
- Chinese investors rank second globally in stablecoin holdings, with 33.3% reported, trailing behind Vietnam’s 58.6%.
Chinese Police Crack Down on Underground USDT Banking Ring
In a recent development, Chinese law enforcement authorities have uncovered a massive underground banking network valued at $1.9 billion, centered on the use of the stablecoin Tether (USDT). Operating primarily in the city of Chengdu, the illicit scheme facilitated the exchange of foreign currencies, with USDT serving as the preferred medium. The extensive operation spanned 26 provinces, leading to the arrest of 193 individuals involved in the illegal activities.
The underground banking operations, which commenced in January 2021, were not limited to financial transactions. Rather, they encompassed a range of commodities, including medicine, cosmetics, and investment assets, destined for overseas markets. Law enforcement efforts resulted in the dismantling of key operational hubs in Fujian and Hunan, with assets worth 149 million yuan ($20 million) frozen in connection to the USDT transactions.
Despite stringent regulations imposed by the Chinese government on cryptocurrency-related activities, such as trading and mining, traders persist in circumventing these restrictions. Reports indicate that Chinese investors rank prominently among the global stablecoin holders, with a significant portion of them engaging in USDT transactions. This trend underscores the challenges faced by authorities in enforcing crypto regulations effectively, as traders continue to find innovative ways to evade legal scrutiny and exploit digital assets for financial gain.