The suspects are suspected of using USDT to operate foreign exchange payment and settlement businesses, providing illegal services to cosmetics and drug smugglers.

Chinese police have uncovered a large underground banking operation that used the popular stablecoin Tether (USDT) to facilitate transfers of up to 13.8 billion yuan ($1.9 billion).

According to a report on the local media WeChat public account, the Chengdu public security department arrested 193 suspects in connection with the case and froze 149 million yuan ($20.6 million) after raiding the locations of the business.

$1.9 billion underground banking business

Since 2021, police investigations have revealed that this underground banking business is led by a criminal gang that originated from China's import and export business. They use USDT to operate foreign exchange payment and settlement businesses, providing illegal services to cosmetics and drug smugglers and locals who obtain foreign assets.

In addition to using stablecoins to transfer funds abroad, the gang also worked with other companies to obtain tax refunds through fraudulent means. The police also found that USDT was used to circumvent national foreign exchange supervision, posing a threat to the country's financial security.

In addition to providing illegal foreign exchange settlement channels, the gang's operations were also linked to work-related crimes, smuggling of contraband and financial fraud, such as obstructing credit card management and defrauding export tax rebates.

Cracking down on China's underground banks

The Longquanyi District Branch of the Chengdu Public Security Bureau first discovered this business in November 2022 when handling a drug case involving underground bank fund settlement.

In June 2023, the Ministry of Public Security set up a task force to raid six cities, including Shanghai, Changsha, Nanjing, Shenzhen, Fuzhou, and Jinhua, to find underground banks. The raids led to the arrest of 25 suspects and the seizure of many payment tools, including bank cards and U-Shields.

In August 2023, another raid was carried out, arresting 168 people in 26 provinces. Subsequently, the Ministry of Public Security began a nationwide campaign to combat underground banking crimes.

Meanwhile, the Chengdu raid was the second this month. Earlier this week, police in Panshi city, Jilin province, busted another underground bank involving 2.14 billion yuan ($29.6 million) and arrested six people, including a suspect wanted in South Korea.

Conclusion:

In this crackdown by the Chinese police on illegal USDT banking, we have seen the firm determination and effective actions of law enforcement agencies in maintaining national financial security and combating economic crimes. Through cross-provincial cooperation and nationwide operations, the police successfully uncovered an underground banking operation involving a total amount of up to 1.9 billion US dollars, arrested a large number of suspects, and froze a large amount of illegal funds. This not only demonstrates the Chinese government's determination in combating underground financial activities, but also sends a clear message to the public: any attempt to disrupt economic order and financial security through illegal means will be severely punished by law.

At the same time, this action also reminds the public that financial security is an important part of national security, and everyone should be vigilant and avoid participating in any transactions that may involve illegal financial activities. Only in this way can we jointly maintain a healthy, stable and orderly financial environment and ensure the sustained and healthy development of the national economy.

Finally, the success of this series of actions also highlights the importance of technology in modern law enforcement. With the development of financial technology, criminal methods are also constantly evolving. Therefore, law enforcement agencies must constantly update technology and methods to adapt to new challenges. Only in this way can we more effectively combat crime and protect people’s property security and the country’s financial stability. #USDT  #Tether  #地下银行  #非法洗钱