Chinese law enforcement authorities have announced a breakthrough in cracking down on illegal financial activities. They busted a large underground banking ring suspected of conducting illegal transactions using Tether’s USDT stablecoin.
The operation spanned multiple provinces and is believed to have facilitated more than $2 billion worth of illegal USDT transactions.
193 suspects arrested in Tether-related banking scandal
According to local media reports ReportThe Chengdu Municipal Public Security Bureau uncovered a major underground bank case involving a total amount of 13.8 billion yuan (US$1.9 billion).
Its business covers 26 provinces, municipalities and autonomous regions. A total of 193 criminal suspects have been arrested across the country, and 58 cases have been filed by public security organs in various jurisdictions. The authorities also froze 149 million yuan in funds related to the operation.
The Longquanyi District Branch launched an investigation after discovering the suspicious person in November 2022. Fund settlement Using underground banks indicates that you may be involved in illegal foreign exchange activities.
It is reported that the Chengdu Municipal Public Security Bureau has established a task force composed of economic investigation, network security, legal affairs, technical investigation and other departments.
On June 1, 2023, the task force carried out coordinated arrest operations in Shanghai, Changsha, Nanjing, Shenzhen, Fuzhou, Jinhua and other places under the command of the Ministry of Public Security and the Ministry of Public Security.
In the end, 25 suspects including Lin, Weng, and Chen were arrested, and important evidence such as bank cards and payment instruments were seized.
Illegal scheme worth $1.9 billion revealed
The investigation found that the criminal group was headed by Lin, Weng, Chen and others, and was mainly engaged in import and export business. The authorities further claimed that they allegedly used USDT as a medium to provide illegal services to customers seeking illegal services. transfer funds foreign.
Their activities mainly involve illegal foreign exchange, payment and settlement business, and are said to facilitate the smuggling of drugs, cosmetics, overseas asset purchases, fraud, etc. tax rebate plan.
The report states that Tether’s use of stablecoins is suspected of circumventing national foreign exchange regulations, posing “significant risks” to foreign exchange security and financial management.
It is understood that the group uses USDT and colludes with other companies to settle funds, and engages in various criminal activities such as financial fraud, job-related crimes, obstruction of drug management, smuggling of contraband, credit card fraud, export tax refund fraud, etc.
Tough crackdown on criminal activities
Tether has been quick to crack down on criminal activity using its digital currency in response to accusations that it is involved in illegal activities.The company’s chief executive, Paolo Ardoino, has always insisted emphasize The company is committed to combating illegal activity and called Tether “the dumbest choice for engaging in illegal activity.”
Recently, Tether has also taken decisive steps to combat illegal activity: freezing Approximately 5.2 million USDT. The action was taken in response to findings from cryptocurrency tracking and compliance platform MistTrack.
The platform identified 12 Ethereum addresses associated with phishing operations, which threaten users and the integrity of the cryptocurrency ecosystem.
Tether has also implemented new security measures aimed at preventing illegal financial activity. The stablecoin issuer has partnered with crypto tracking and compliance platform Chainaanalysis to develop a tool specifically designed to monitor the secondary market. This enables Tether to promptly detect and resolve any suspicious or unauthorized transactions.
Featured image from Shutterstock, chart from TradingView.com
