Bitrabo Editorial
In a breakthrough against illegal financial activities, Chinese law enforcement agencies have dismantled an underground banking gang accused of illegal transactions using Tether’s USDT stablecoin. The operation is suspected to have facilitated over $2 billion in illicit transactions.
193 Individuals Arrested in Tether-Linked Banking Scandal
The Chengdu Municipal Public Security Bureau uncovered a significant underground banking case involving 13.8 billion yuan ($1.9 billion) across 26 provinces, municipalities, and autonomous regions. 193 suspects have been arrested nationwide, with authorities freezing 149 million yuan associated with the operation.
An investigation initiated in November 2022 identified suspicious fund settlements through underground banks, leading to a task force being formed by the Chengdu Municipal Public Security Bureau, resulting in arrests across multiple locations.
$1.9 Billion Illegal Scheme Exposed
The criminal gang, led by individuals including Lin, Weng, and Chen, operated within the import and export business sector, allegedly using USDT for illegal fund transfers abroad. Their activities involved illegal foreign exchange, payment, and settlement businesses, enabling various criminal activities such as smuggling, fraudulent schemes, and financial fraud.
Authorities claim Tether’s use of stablecoin allowed for evasion of national foreign exchange supervision, posing significant risks to financial management.
Tether’s Response to Criminal Activity
Tether CEO Paolo Ardoino emphasized the company’s commitment to combatting illicit activities. Tether recently froze approximately $5.2 million USDT due to findings from crypto tracking platform MistTrack identifying phishing operations threatening users and the cryptocurrency ecosystem.
Implementing new security measures in collaboration with Chainalysis, Tether developed a monitoring tool for secondary markets to detect and address suspicious transactions promptly.
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