The Leshan Intermediate People's Court has delivered a landmark verdict, sentencing cryptocurrency trader Wan Mouyuan to 13 years imprisonment for operating an illegal foreign exchange scheme involving 234 million yuan ($32.2 million) worth of USDT transactions. This ruling marks one of China's most severe penalties for crypto-related financial crimes to date and signals intensified enforcement of the country's strict capital controls.
Case Details & Legal Precedent
- Operation Mechanism: Wan's network facilitated cross-border forex transactions by converting RMB to USDT, then to USD, bypassing China's $50,000 annual forex limit
- Judicial Rationale: Court classified the activity as "illegal business operation" under Article 225 of China's Criminal Law
- Broader Impact: Sets binding precedent for future crypto-facilitated forex cases nationwide
Market Context & USDT's Role
Despite the conviction, Tether (USDT) maintains price stability at $1.00, with:
- $163.8B market cap
- $110.5B daily volume (per CoinMarketCap)
The case highlights ongoing regulatory tensions as:
1) USDT remains critical for global crypto liquidity
2) Authorities increasingly target its use in circumventing financial controls
Industry Implications
- Chinese Traders: Likely to shift to OTC platforms with stricter KYC
- Exchanges: Pressure to monitor USDT-forex arbitrage patterns
- Policy Outlook: May accelerate China's CBDC (digital yuan) adoption for traceable cross-border settlements
Legal Expert Commentary:
"This verdict removes any ambiguity – using crypto to bypass forex controls now carries existential risk in China. We'll see either sophisticated compliance adaptations or migration of such activities offshore."
— Prof. Zhang Wei, Shanghai University of Finance and Law
The Leshan ruling follows China's July 2025 Anti-Money Laundering Amendments, which expanded surveillance of crypto-to-fiat conversions. With USDT involved in 63% of China's crypto crime cases last year (per National Anti-Fraud Center data), analysts expect further crackdowns on P2P trading platforms.