Group Arrested in China for Laundering $1.7 Billion in Cryptocurrency – This is What Happened

Group Arrested in China for Laundering .7 Billion in Cryptocurrency – This is What Happened

Police in China have arrested 63 people accused of laundering 12 billion yen ($1.72 billion) through crypto. The public security bureau of the city of Tongliao, in northern China’s Inner Mongolia, said that starting in May 2021, this criminal group converted profits from illegal sources — including pyramid schemes, scams, and gambling — into the main stablecoin, Tether (USDT). In addition, the funds were spread across various crypto accounts that the suspects allegedly used to convert the money back into Chinese yuan. According to the statement, the organization is hiring individuals throughout China using Telegram; an app restricted in China. Then, according to police, these people would create cryptocurrency accounts to be used for money laundering. Each participant in this scheme was given a commission based on how many cryptocurrency transactions they handled.

Crypto as a physical barrier

The organization had a clear division of labor, authorities said. After each money laundering operation, gang leaders, team leaders, cashiers, lower-level money launderers, and people at other levels would receive commissions in different proportions. An official designated as “the person in charge” was quoted in the statement as saying that money laundering through digital currency is a relatively new method and makes cases difficult to process. By putting in place a physical barrier, there is no way to track the flow of funds or traditionally find the recipient, and tracking and recovering digital currencies are also very complicated.”

The person further said that it was difficult to obtain evidence but that the police managed to solve it through several methods, such as questioning the people involved, investigating foreign cryptocurrency exchanges, and tracing blockchain records. This criminal organization has been found to help domestic and foreign criminal groups launder money by using digital currency transactions and exchanges.

According to the statement, the Public Security Bureau was alerted to find that one of the suspects had a monthly transaction volume of 10 million yen (US$1.44 million) in his bank account, prompting an investigation into “suspected money laundering crimes “prompted. ” 17 provinces, autonomous regions, and municipalities received more than 200 police officers. Two suspects were lured back to China after escaping to Bangkok, Thailand.

Authorities said more than 130 million yen ($18.6 million) in profits from the group were confiscated, and more than 10 money laundering centers were destroyed.

China is amid its latest crackdown on cryptocurrencies, and this is just the latest in a string of cryptocurrency-related arrests. In March, Shanghai police dismantled a pyramid scheme involving more than a 100-million-yen worth of cryptocurrency. ($14.3 million). In September, police in Hengyang, Hunan province, arrested 93 people involved in a 40 billion yen ($5.73 billion) money laundering scheme.

As of last week, the offshore Chinese yuan (CNH) has been added to the Tron blockchain by Tether, the entity that created USDT. Thanks to this action, Chinese users can now send and receive payments using stablecoin.

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