China busts $2 billion USDT money laundering operation

Police in China have announced the dismantling of a large underground banking gang accused of facilitating illegal transactions with almost $2 billion worth of tether (USDT).

Sichuan and Chongqing authorities said on Tuesday that 193 suspects across 26 Chinese provinces have been arrested as a result of the operation. 

According to local media, the gang allegedly used USDT to evade China’s foreign exchange regulations and provide a means for criminals to send their funds overseas, transacting 13.8 billion yuan ($1.9 billion).

Read more: How Triad-linked gang used crypto and casinos to launder $10B

Two ‘dens’ in Fujian and Hunan belonging to the gang were reportedly destroyed by authorities in 2023 and 149 million yuan ($20.6 million) of funds linked to the gang were frozen as part of the case. 

The gang’s illegal foreign exchange reportedly committed “financial fraud, job-related crimes, obstruction of drug management, smuggling of goods prohibited by the state…. obstruction of credit card management, defrauding export tax refunds and other criminal activities.”

USDT has also been used to pay gold smugglers in Nepal shifting 33kg of the precious metal into the country before returning to Tibet with sacks of cash, musk, and medicinal caterpillar fungus called yarsagumba.

Additionally, the United Nations claims that USDT is at the heart of a ‘parallel banking system’ created by organized crime in Southeast Asia. It said in a report, “Online gambling platforms, and especially those that are operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether or USDT on the TRON25 blockchain.”

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