The Chinese police recently made headlines for busting a massive underground banking operation that utilized the popular stablecoin Tether (USDT) to facilitate transactions worth 13.8 billion yuan ($1.9 billion). This operation, which was based in Chengdu Municipal, involved 193 suspects who were directly linked to the criminal activities. It was reported that the police managed to freeze 149 million yuan ($20.6 million) after raiding the location of the illegal operation.
Criminal Gang Involvement
Investigations conducted by the police revealed that the underground banking operation was orchestrated by a criminal gang with roots in the Chinese import and export business. The gang used USDT to facilitate foreign exchange payments and settlements, providing illicit services to individuals involved in illegal activities like drug and cosmetics smuggling. Additionally, the gang collaborated with other companies to fraudulently obtain tax refunds, further complicating the web of criminal activities.
The use of Tether (USDT) in this illegal operation also posed a threat to China’s financial security. The gang utilized the stablecoin to bypass national foreign exchange regulations, which ultimately could have had devastating consequences for the country’s economic stability. Moreover, the gang’s activities extended beyond foreign exchange crimes and delved into job-related offenses, contraband smuggling, and financial fraud, creating a network of criminal behavior with far-reaching implications.
Following the discovery of the illegal operation, the Chinese Ministry of Public Security initiated a series of raids in six different municipalities across the country. These raids resulted in the arrest of multiple suspects and the confiscation of various payment instruments, including bank cards and U-shields. Subsequent raids in other provinces led to the arrest of additional individuals involved in similar illegal activities.
In response to the growing threat posed by underground banking operations, the Ministry of Public Security launched a nationwide campaign to crack down on these criminal activities. The recent raids in Chengdu and Panshi City are part of this larger effort to root out illegal operations that utilize cryptocurrencies like Tether to evade authorities and engage in illicit financial activities. The arrests made during these operations highlight the government’s commitment to upholding the rule of law and maintaining the integrity of the financial system.