Chinese Police Arrest Group for Laundering $1.7 Billion in Crypto – Here's What Happened

Chinese police have arrested 63 people that are being accused of money laundering. The individuals are accused of laundering 12 billion Chinese yuan, equivalent to $1.7 billion. The arrest comes as Beijing intensifies its crackdown on the trading of digital currencies.

Chinese police arrest people accused of laundering $1.7B in crypto

The group in question started laundering crypto assets in May last year. The group laundered money acquired illegally through fraud, pyramid schemes, and gambling. The proceeds made from these activities were later converted into the USDT stablecoin. UST is a stablecoin issued by Tether, whose value is pegged to the US dollar on a 1:1 basis.

The news of this arrest was made by the Public Security Bureau of Tongliao City in Inner Mongolia. Besides converting the funds into the USDT stablecoin, the group also created multiple accounts that they used to trade cryptocurrencies before converting them back to the Chinese yuan.

The group also hired people around the country to create crypto accounts. They hired these people using Telegram, a messaging platform banned in China. The China police said that the recruited people would be used to create crypto trading accounts that would later be used to launder illicit funds.

The people who created these accounts were lured into the scheme by being promised a commission depending on the amount of money they laundered. The police have confirmed that the proceeds seized from the gang equate to more than 130 million Chinese yuan.

The Public Security Bureau received an alert after noticing that one of the suspects had made monthly transactions of more than 10 million yuan using his bank account. The police have also said that two of the suspects involved in the laundering activities had escaped to Bangkok, but they had been urged to return to China.

China’s ban on crypto activities

China started cracking down on crypto trading and mining activities last year. At the time, the country imposed a ban on all crypto-related activities, which remains effective. Before the ban, China was the largest global crypto hub and even accounted for the highest Bitcoin mining hash rate.

While Beijing has tried to eradicate crypto trading and mining activities from the country, the attempts have been futile. There is still a significant amount of digital asset activities in the country. The country is also back to being one of the largest Bitcoin mining locations globally.

One strategy Chinese users use to access cryptocurrencies is turning to overseas exchanges to trade these assets. However, over the past year, Beijing has intensified its crackdown against crypto activities, making it more difficult for Chinese users to access these assets.

In 2021, Beijing arrested more than 1,100 suspected of laundering funds using cryptocurrencies. The efforts being made by the government could once again take China off the map as a crypto hub.


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