Chinese Authorities Uncover $1.9 Billion Illegal Banking Network Connected to USDT
Crypto News– Authorities in Southeast China’s Sichuan province have dismantled an underground banking network that employed the USDT stablecoin for foreign currency exchanges, with transactions valued at least 13.8 billion yuan ($1.9 billion).
The police in Chengdu city revealed in a state media report that the criminal group primarily served individuals involved in smuggling medicine, cosmetics, or those seeking overseas asset acquisition. A total of 193 suspects have been apprehended nationwide in connection with this operation, with authorities freezing assets worth 149 million yuan.
Underground banking, which involves transferring money through informal channels instead of official ones, was the modus operandi of the criminal group.
Use of USDT Stablecoin
Led by individuals with the surnames Lin, Weng, and Chen, the syndicate allegedly utilized the USDT stablecoin to facilitate illegal currency exchanges, starting from January 2021. This crackdown follows a separate case in Jilin province, where another underground bank involving $295 million was uncovered, also utilizing cryptocurrency for currency conversions. China’s strict capital control policies have prompted individuals to turn to cryptocurrencies as a means to bypass regulations, leading to such illicit activities.
FAQs
What is this illegal banking network and why is it significant?
The illegal banking network uncovered by Chinese authorities hosted approximately $1.9 billion worth of cryptocurrency, primarily linked to USDT (Tether), and accused of violating China’s financial regulations. This highlights increasing pressures on the global regulation and oversight of cryptocurrencies.
What role did USDT play in this illegal banking network?
USDT is typically used as a stablecoin pegged to the US dollar in cryptocurrency markets. However, in this case, it is alleged to have been utilized in connection with an illegal banking network. Its role on the network could have been to facilitate the hiding and transfer of cryptocurrencies.
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