China dismantles USD $2 billion clandestine bank that used USDT – DiarioBitcoin
By Hannah Perez
Chinese law enforcement shut down a banking operation that leveraged USDT for foreign currency exchanges. It is the second case of its kind reported this week.
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- China Police Dismantle Banking Operation Leveraging USDT
- They used Tether’s USDT to make illegal currency exchanges outside official channels
- More than 190 suspects were arrested, and it is not the first similar case this week
Chinese authorities have dismantled a clandestine banking operation that used the stablecoin Tether (USDT) for the exchange of foreign currencies and that operated more than USD $1.9 billion.
Officials in the Chinese city of Chengdu announced the closure of operations that allegedly helped facilitate billions of yuan in illegal transactions. In a press report that was picked up by the media, local police provided details about the operations and reported the arrest of 193 suspects throughout the country.
According to the cited report, clandestine banking operations with USDT, pegged to the US dollar, began in January 2021 and were mainly used to smuggle medicines, cosmetics and investment assets abroad.
The criminal group apparently used the stablecoin emited by Tether to evade China’s foreign exchange regulations and provide an unofficial channel for criminals to send their funds abroad, reported Protos.
The police raid led to the destruction of two clandestine hideouts in Fujian and Hunan, and police also froze 149 million yuan worth US$20 million linked to USDT’s banking operations, according to reports.
The operations would have incurred crimes for “financial fraud, work-related crimes, obstruction of drug management, smuggling of goods prohibited by the State, obstruction of credit card management, fraud of export tax refunds and other criminal activities“he added Protos.
Illegal cryptocurrency activity in China
Just a few days ago, a similar case was reported of another clandestine bank that illegally used cryptocurrencies to carry out currency exchange operations between the Chinese yuan and the South Korean won, and that invoiced almost USD $300 million.
Another similar case of money laundering was also seen last year in the northern Chinese province of Shanxi, which also leveraged USDT. Police arrested 21 suspects involved at that time.
Although trading and other cryptocurrency activities are prohibited in mainland China, Chinese traders have found ways to circumvent the national ban and use this asset class in alternative ways.
China first implemented tough controls against cryptocurrencies in 2017, then extended the ban in 2021 with a series of strict measures, including a restriction on cryptocurrency mining. Bitcoin.
Despite this, many local users have been reported to turn to decentralized (DeFi) platforms or employ VPN services to hide their location in order to trade cryptocurrencies on online exchanges. and mining Bitcoin Nor has it completely died out in the country, according to previous reports.
A report published by Kyros Ventures, which was picked up by Cointelegraphindicates that Chinese traders are among the largest stablecoin holders of the world. The report shows that 33.3% of Chinese investors own stablecoins, putting them in second place just behind Vietnam with 58.6%.
Article by Hannah Estefanía Pérez / DailyBitcoin
Picture of Unsplash
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