Chinese authorities arrest 63 people accused of using crypto to launder $1.7 billion
(Kitco News) – Amid Beijing’s ongoing crackdown on the trading of digital currencies, Chinese authorities have reportedly arrested 63 individuals who have been accused of laundering as much as 12 billion Chinese yuan ($1.7 billion) using cryptocurrency.
According to a statement released by the Public Security Bureau of Inner Mongolia’s Tongliao city in northern China, the criminal gang had been in operation since May 2021 and had a network that spanned across China. The organization had a well-defined division of labor to keep the system running smoothly.
Once a money laundering request came in, the gang would assign tasks to different teams, with leaders recruiting low-level participants to carry out online and offline actions. The messaging service Telegram was used to recruit new accomplices throughout China into the operation. Once in, new members would open crypto accounts to help launder the funds. The amount each participant received would depend on how much money they laundered.
The first step in the process was to convert illicit funds collected by other organizations through pyramid schemes, fraud and gambling into the stablecoin Tether (USDT). Next, the gang would use its network of crypto exchange accounts to convert the ill-gotten gains back into the Chinese yuan.
The gang would receive a cut of the laundered funds, and the rest would go to the organization that supplied the illicit funds originally.
The investigation initially began back in June after suspicious banking activity was detected, including several monthly transactions that exceeded $1.4 million. Following the preliminary investigation, the Horqin branch dispatched 230 officers on Sept. 7 to 17 different provinces, including Liaoning, Jilin, Heilongjiang, Guangdong, Fujian and Henan.
During the “thunder attack,” authorities seized 32 million yuan in cash, 18 million yuan worth of fixed assets, and 75 million yuan worth of cryptocurrency, bringing the total amount of illegal funds seized to roughly 130 million yuan. The operation lasted for more than three months.
This latest bust follows another high-profile operation in September in which 93 individuals were arrested for their involvement in a crypto money laundering ring valued at $5.6 billion. In 2021, Chinese authorities arrested more than 1,100 people who were suspected of laundering money using cryptocurrency.
Despite China’s hardline stance on cryptocurrencies, including a ban on all trading and cryptocurrency mining, these incidents show that the digital currency ecosystem in the country remains large and well-established, highlighting the difficulty governments face in eliminating the crypto market.
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