21 Arrested in China for $54 Million USDT Money Laundering Investigation
authorities in Porcelain‘s Shanxi Province have arrested 21 people allegedly involved in a large Tether (USDT) money laundering scheme.
The scheme, which is estimated to have generated more than $54 million, used the US dollar-backed stablecoin USDT to launder money, the country’s national broadcasting service CCTV. reported on Tuesday.
According to law enforcement investigators, the suspects operated in four provinces and had been buying USDT at a discount through over-the-counter cryptocurrency trading services since October 2021.
They allegedly made illegal profit by selling tokens at inflated prices through social media and money laundering platforms.
These transactions amounted to a staggering 54.8 million USDT (equivalent to CNY 380 million) in a span of almost three years.
During the arrests, authorities seized 40 cell phones, more than 1 million yuan ($138,000) in USDT, and more than 200,000 yuan in cash from the suspects’ accounts.
The 21 people reportedly confessed to the crime of money laundering for cybercriminals using the stablecoin. The case is currently under further investigation.
Money laundering through cryptocurrencies has become a major concern for authorities around the world.
The anonymous nature of transactions and the ease of transferring funds across borders make cryptocurrencies an attractive option for criminals looking to legitimize illicit gains.
In April, the United States Treasury revealed that North Korean Hackers and fraudsters take advantage of loopholes in the decentralized finance (DeFi) space to launder money and hide criminal activity.
“The assessment finds that illicit actors, including ransomware cybercriminals, thieves, fraudsters, and cyber actors from the Democratic People’s Republic of Korea (DPRK), are using DeFi services in the process of transferring and laundering their illicit proceeds,” Treasury said at the time.
Chinese Users Find New Ways to Buy Crypto Despite Ban
Despite China’s cryptocurrency issuance ban in 2017 and subsequent cryptocurrency transaction ban in 2021, Chinese citizens are still finding ways to access cryptocurrency.
These stores allow customers to easily purchase digital assets with cash, often without revealing their identity or the source of their money.
With cryptocurrency transactions banned on the mainland and overseas exchanges banned from serving customers on land, Hong Kong’s proximity to China makes it an attractive destination for cryptocurrency enthusiasts.
These often lightly regulated retail crypto shops offer a loophole for customers to easily purchase digital assets in large volumes, the FT said.