Chinese police in Shanxi Province have apprehended 21 individuals allegedly involved in a USDT money laundering scheme, according to a report by China’s national broadcasting service, CCTV, on Tuesday. The suspects are accused of illegally purchasing and selling USDT, an asset-backed stablecoin pegged to the US dollar and operated by Tether Limited Inc., a subsidiary of iFinex Inc. based in Hong Kong.
Investigations reveal that the arrested individuals, spanning four provinces, purchased discounted USDT through over-the-counter crypto trading services since October 2021. They allegedly profited by selling the tokens at inflated prices using social media platforms and money laundering services. Over nearly three years, these transactions amounted to a staggering 54.8 million USDT (equivalent to approximately CNY 380 million).
During the arrests, police confiscated 40 cell phones and seized more than 1 million yuan (approximately $138,000) in USDT from the suspects’ accounts. Additionally, over 200,000 yuan in cash was seized. While all 21 suspects have reportedly confessed to the accusations, including aiding cybercriminals in converting Chinese yuan to USDT, the case remains under investigation.
Law enforcement authorities informed CCTV that USDT has become a preferred choice for crypto money launderers due to its transactional ease and anonymity. Notably, China banned cryptocurrency issuance in 2017 and completely prohibited crypto transactions in 2021. However, Chinese citizens can still access cryptocurrencies through decentralized finance (DeFi) platforms and proxy internet servers.
The arrests made in the USDT money laundering scheme signify the Chinese government’s continued efforts to combat illicit activities related to cryptocurrencies. As investigations unfold, authorities will likely tighten regulatory measures to curb money laundering and protect the financial system’s integrity.