The group obtained money illegally through online pyramid schemes, fraud, and gambling, then exchanged the money for Tether, a stablecoin backed by the US dollar. Beijing, China has banned mining and selling cryptocurrencies, yet between June 2021 and July 2022, China registered more than US$220 billion in total cryptocurrency transactions.
In the most recent case highlighting the opaqueness of China’s cryptocurrency market, which ranks No. 4 globally despite an official ban on trading by the central government, police in the northern Chinese region of Inner Mongolia have detained 63 people for laundering 12 billion yuan (US$1.7 billion) in cryptocurrencies.
The crypto gang began collecting illegal assets through online pyramid schemes, fraud, and gambling in May 2021. They then exchanged the monies for Tether, a stablecoin linked 1:1 to the US dollar.
According to a statement released over the weekend by the Public Security Bureau of Tongliao city in Inner Mongolia, the money was divided across several anonymous crypto accounts before being exchanged for renminbi.
Even while there is minimal regulation or legal protection for participants in China, which was formerly the largest crypto investment market in the world, there is still a sizable underground network. 8% of FTX’s clientele were from mainland China, according to court documents in the case of the defunct cryptocurrency exchange.
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