Reports from Sichuan province indicate Chinese police have exposed a large underground banking network utilizing Tether’s USDT stablecoin. The crackdown focused on suspects evading foreign exchange regulations, enabling illicit transactions totaling nearly $2 billion in USDT.
The accused allegedly used the stablecoin to bypass national foreign exchange rules and establish illegal channels for foreign exchange settlements, according to the report. Authorities reportedly closed two underground banking centers in Fujian and Hunan provinces. The investigation extended to 26 provinces in China, resulting in the nationwide arrest of over 190 suspects by law enforcement.
Despite Sichuan’s prior prominence in the crypto sector for its inexpensive hydroelectric power, which drew Bitcoin miners seeking affordable energy, the situation swiftly shifted with Beijing’s comprehensive prohibition on all cryptocurrency mining activities and transactions nationwide.
In late 2023, the Supreme People’s Procuratorate (SPP) and the State Administration of Foreign Exchange (SAFE) emphasized criminal cases linked to stablecoins. They noted that fiat-backed digital currencies had gained popularity as intermediaries for yuan trading against other currencies in illegal foreign exchange cases.
0 Comments