China Imprisons Five for $166M USDT Money Laundering Operation
Iris Coleman Oct 29, 2025 20:31
A Beijing court has sentenced five individuals for laundering $166 million using USDT, marking a significant crackdown on crypto-related financial crimes in China.
In a significant move against crypto-related financial crimes, a Beijing court has sentenced five individuals to prison for their involvement in a $166 million money laundering operation using USDT stablecoins. The case underscores China's increasing efforts to clamp down on illegal financial activities facilitated by digital currencies, according to CryptoNews.
Details of the Operation
The convicted individuals orchestrated a sophisticated scheme that converted client funds into USDT to facilitate illegal cross-border transfers. Between January and August 2023, they processed 1.182 billion yuan ($166 million) through various accounts. The Beijing Municipal People’s Procuratorate revealed that the operation used virtual currency as a "bridge" for illegal foreign exchange trading.
Lin Jia led the group, collaborating with others to channel client funds through multiple bank accounts. They converted yuan payments into USDT using Tether trading platform accounts, enabling cross-border transfers while profiting from each transaction. The operation's complexity and scale made it one of China's most significant prosecutions of crypto-enabled financial crime.
Advanced Forensic Techniques
Chinese authorities employed advanced forensic methods to trace the crypto money trail, combining financial data analysis with blockchain transaction tracing. By correlating traditional bank account activities with virtual currency transactions, investigators identified suspicious patterns that contradicted the defendants' claims of legitimate crypto speculation.
The prosecution's approach involved remote examination of data from overseas platforms, ensuring legal compliance while building a robust case. This comprehensive strategy addressed the challenges of evidence collection in cross-border economic crimes.
Regulatory Implications and Responses
The case was highlighted at the 2025 Financial Street Forum, where officials warned of the threats posed by stablecoins to global financial stability. Pan Gongsheng, governor of the People’s Bank of China, emphasized the risks of stablecoins in amplifying vulnerabilities in the financial system and reiterated China's zero-tolerance policy towards private digital currencies.
This crackdown coincides with China’s broader regulatory measures against stablecoins, including orders for tech giants like Ant Group and JD.com to halt their stablecoin issuance plans in Hong Kong. The Chinese government has also directed brokerages to cease promoting stablecoins, citing fraud and speculative risks.
These developments reflect China's firm stance on maintaining control over currency issuance and its cautious approach to the adoption of digital financial assets. With stablecoin markets reaching significant capitalizations globally, China's regulatory actions are poised to influence the international digital currency landscape.
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