The police in Sichuan, China, have uncovered an underground banking scheme and seized assets totaling over $1.9 billion US dollars, used for international illegal crypto-related transactions.
The suspects exploited the anonymity of USDT, a US dollar-backed stablecoin, to facilitate the transfer of funds for the purchase of contraband items such as medicines and cosmetics.
They were also used for the acquisition of assets overseas. After the raid, the law enforcement agency was able to arrest 193 suspects.
The raid is part of a continuous security build-up carried out by the Economic Investigation Bureau of the Ministry of Public Security and the Economic Investigation Corps of the Sichuan Provincial Public Security Department.
It has also received support from the Anti-Money Laundering Division of the Sichuan Branch of the People’s Bank of China and the Sichuan Branch of the State Administration of Foreign Exchange
China has taken a strict stance against cryptocurrencies, declaring all transactions illegal. Despite the “official ban”, crypto trade is still alive in China, with many assuming that crypto is fully banned due to government crackdowns and widespread reports.
In other news, the Chinese government has released its latest blockchain project yet. Titled Ultra-Large Scale Blockchain Infrastructure Platform for the Belt and Road Initiative, the project aims to establish a robust public blockchain infrastructure platform.
The Chinese crackdown on crypto has been extensive, with restrictions on financial and payment institutions’ involvement with Bitcoin in 2013, the banning of initial coin offerings (ICOs) in 2017, and the closure of virtual currency exchanges.
In 2021, China cracked down hard on domestic crypto mining, and while the regulations do not restrict people from holding cryptocurrency or peer-to-peer trading between individuals, they do consider virtual currency-related business activities as illegal financial activities.
There have also been instances of crypto fraud, such as the case of Zhimin Qian, who defrauded 128,000 investors in a multi-billion pound scam and remains on the run.
Additionally, despite the crackdown, some Chinese individuals have found ways to evade the restrictions, such as using bank cards issued by small rural commercial banks to buy cryptocurrencies through grey-market dealers.
