China Investigating Crypto Money Laundering Scheme

On Saturday, the Inner Mongolia Autonomous Region Public Security Bureau made the arrests public while also seizing about 4.5 million dollars worth of Chinese currency.

According to police, those detained have connections to a money-laundering gang that began operating in May 2021.

This occurs as Beijing intensifies its crackdown on China’s cryptocurrency market, which ranks fourth globally despite an official trading ban.

Police charged the group with obtaining illegal funds from various sources, including online pyramid schemes, fraud, and gambling. The money was then exchanged for Tether, a stablecoin on par with the dollar.

Eventually, the funds were transferred back into the Chinese yuan using a variety of cryptocurrencies.

According to the police, the participants recruited foreign participants and assisted in converting the money back into Chinese currency using the messaging app Telegram, which is outlawed in China.

In the northern part of the country, the operation involved more than 200 police officers. According to police, two suspects were also located in Bangkok, Thailand, and extradited to China.

After discovering a bank account with consistent monthly deposits of roughly $1.4 million or 10 million yuan, investigators were first alerted in July.

For more than a year, China has been attempting to ban cryptocurrencies from its financial markets. Beijing announced a multi-billion dollar shutdown of the cryptocurrency trading sector in June 2021.

The country still has a sizable underground community despite the official ban.

In connection with money laundering related to cryptocurrencies, Chinese authorities detained over 1,100 people in 2021.

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