Chinese police uncover $54 million USDT money laundering scheme

By Forkast July 19, 2023 In China, Cryptocurrencies, Tether

Police in China’s northern Shanxi Province made 21 arrests in relation to an alleged USDT money laundering scheme amounting to over US$54 million, the country’s national broadcasting service CCTV reported on Tuesday. USDT is an asset-backed stablecoin pegged to the U.S. dollar and operated by Tether Limited Inc., a subsidiary of Hong Kong-based company iFinex Inc.

Fast facts

  • Police investigators allege that the suspects, operating across four provinces, were engaged in purchasing discounted USDTs through over-the-counter crypto trading services since October 2021. The accused then allegedly made illegal profits by selling the tokens at higher prices via social media and money laundering platforms. Police say those transactions totalled over 54.8 million USDT (CNY380 million) across the nearly three-year period.
  • At the scene of the arrest, police recovered a total of 40 cellphones, seizing more than 1 million yuan (US$138,000) in USDTs from the accounts of the accused. They also seized over 200,000 yuan in cash. CCTV reports that, while all 21 suspects have confessed to the accusations — which include facilitating the conversion of Chinese yuan to USDT by cybercriminals — the case remains under investigation.
  • Police told CCTV that USDT has become a preferred choice for crypto money launderers due to the ease and anonymity of its transactions.
  • Although China outlawed cryptocurrency issuance in 2017 and then issued an outright ban on crypto transactions in 2021, Chinese citizens can still access cryptocurrencies through decentralized finance (DeFi) platforms and proxy internet servers.

Author profile

Tom Zuo

Tom Zuo is part of the Forkast.News editorial team.

Editor profile

Will Fee

Will Fee is an editor and Asia correspondent based in central Tokyo. He holds a Master of Philosophy in Japanese Studies from Oxford University, where he specialized in postwar politics, culture and society. He previously covered domestic politics for The Japan Times and is interested in exploring the political implications of a regulatory pivot toward crypto and Web3 in East Asia.


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