Authorities in China’s Sichuan province have taken down a massive underground banking syndicate that utilized the USDT stablecoin to facilitate illegal foreign exchange transactions worth at least $1.9 billion.
The criminal network, active since early 2021, helped clients smuggle goods like medicine and cosmetics or purchase overseas assets by skirting China’s stringent capital controls.
In a nationwide crackdown, police arrested 193 suspects linked to the syndicate, freezing around $21 million in related assets. The illicit operation leveraged the anonymity of cryptocurrencies to bypass regulation">financial regulations.
This case follows another recent crypto-enabled underground banking bust in Jilin involving $295 million in transactions. Chinese regulators have clamped down on such operations as digital assets emerged as a conduit for circumventing strict forex rules.
The multibillion-dollar sting underscores Beijing’s zero-tolerance approach toward financial crimes employing cryptocurrencies. Maintaining firm oversight on cross-border capital flows remains a priority amid the rise of decentralized digital currencies.
While providing transparency, blockchains have inadvertently enabled new avenues for illicit money transfers that authorities globally are striving to disrupt through enhanced scrutiny and enforcement actions.
