USDT Smuggling Scheme: $1.9B Uncovered, Massive 193 Arrests in China
USDT was a key focus during the 15th “May 15” Publicity Day for Combating and Preventing Economic Crimes, which highlighted a significant breakthrough against economic malfeasance. The Sichuan and Chongqing Public Security Economic Investigation Departments revealed their latest successful operation at the Chengdu Tianfu International Financial Center, showcasing efforts to
USDT was a key focus during the 15th “May 15” Publicity Day for Combating and Preventing Economic Crimes, which highlighted a significant breakthrough against economic malfeasance. The Sichuan and Chongqing Public Security Economic Investigation Departments revealed their latest successful operation at the Chengdu Tianfu International Financial Center, showcasing efforts to dismantle a vast underground banking network.
At the forefront of the event, the Chengdu Public Security Bureau disclosed two landmark cases of economic crimes. One involved an enormous underground bank case, with transactions amounting to 13.8 billion yuan. The suspects utilized USDT, a stablecoin pegged to the US dollar, to circumvent national foreign exchange regulations and facilitate illegal foreign exchange settlements. This case spanned 26 provinces, leading to the arrest of 193 suspects nationwide.
USDT Key in Major 2023 Bank Dismantling Effort
In 2023, spearheaded by the Economic Investigation Bureau of the Ministry of Public Security and the Sichuan Provincial Public Security Department, with critical support from the Anti-Money Laundering Division of the Sichuan Branch of the People’s Bank of China and the State Administration of Foreign Exchange, a comprehensive joint task force was formed. This collaboration included the Economic Investigation Detachment and the Longquanyi District Branch of the Chengdu Public Security Bureau. The task force dismantled two major underground bank dens in Fujian and Hunan, with assets totaling 13.8 billion yuan frozen and 149 million yuan seized.
Zhong Yu, captain of the Eighth Brigade of the Economic Investigation Detachment, reported that the operation began in November 2022 when the Longquanyi District Branch identified suspicious fund settlements through underground banks. By June 1, 2023, the task force had apprehended 25 suspects across multiple cities, seizing numerous bank cards and other payment instruments.
The investigation unveiled that since January 2021, a criminal gang led by individuals surnamed Lin, Weng, and Chen exploited USDT to provide illegal foreign exchange services. These activities supported various criminal enterprises, including drug smuggling, illegal asset purchases, and fraudulent tax refunds. The use of USDT allowed the gang to bypass national foreign exchange controls, posing significant risks to financial security.
In August 2023, leveraging the case’s broader criminal network, the Ministry of Public Security orchestrated a nationwide crackdown, arresting an additional 168 suspects across 26 provinces. This operation marked a significant triumph in Sichuan Province’s ongoing campaign against underground banking crimes.
As the case progresses, it underscores the critical need for vigilant financial regulation and the persistent threat posed by digital currencies like USDT in facilitating economic crimes.
