Chinese police arrest gang who laundered $1.7 billion via cryptocurrency

Police in China arrested 63 people accused of laundering as much as 12 billion Chinese yuan ($1.7 billion) via cryptocurrency, amid Beijing’s intense crackdown on the trading of digital coins.

Starting from May 2021, the criminal gang allegedly used the proceeds from illicit sources including pyramid schemes, fraud and gambling and converted it into the cryptocurrency tether, a stablecoin that is pegged one-to-one with the U.S. dollar, the Public Security Bureau of Inner Mongolia’s Tongliao city in northern China, said in a statement over the weekend.

The gang are said to have used various different cryptocurrency trading accounts to convert the money back into Chinese yuan.

They used the messaging service Telegram, which is blocked in China, to recruit various people around the country who would open crypto accounts to help launder the funds, the police said. Those people would receive a commission according to how much money they laundered, the police added.

The authorities said more than 130 million Chinese yuan worth of proceeds was confiscated from the gang.

The case highlights that even after Beijing’s attempts to wipe out cryptocurrency-related activities, including trading and mining, there is a still a large amount of digital currency activity taking place.

Chinese users have typically turned to overseas-based exchanges to trade cryptocurrencies, but this became harder as the crackdown from authorities intensified last year.

The Public Security Bureau was alerted when they noticed that one of the suspects had a monthly transaction volume of 10 million yuan in his bank account. The authorities said two of the suspects had fled to Bangkok, Thailand, but were persuaded to return to China. The police did not elaborate on what this involved.

Last year, Chinese police arrested over 1,100 people suspected of laundering money via cryptocurrencies.