Police in China arrest gang who laundered $1.7 billion via crypto

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

Starting from May 2021, the criminal gang reportedly started converting proceeds from pyramid schemes, fraud, gambling and other illicit activities into tether, a so-called stablecoin pegged to the US dollar, according to a weekend statement from the Tongliao Public Security Bureau that serves eastern Inner Mongolia.

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.

At least 130 million Chinese yuan worth of proceeds were confiscated following an investigation that involved more than 200 police officers. The investigation was jumpstarted in July after a local bank account held by one of the accused suspects was used for monthly deposits of more than 10 million yuan in cash.

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.