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China cracks down on the first case of using USDT to launder money

  • The authorities arrested the criminal group that laundered money via online gambling platforms.
  • USDT is popular among Chinese gamblers, making it a perfect vehicle for money laundering.
China cracks down on the first case of using USDT to launder money
Tanya AbrosimovaTanya AbrosimovaIndependent Analyst

Chinese police cracked the criminal group that provided money-laundering services for overseas online gambling websites via the USDT platform. The local media outlet reports that Guangdong's police cracked the first money laundering case that involved the popular stablecoin USDT. 

The police arrested 77 suspects and blocked three gambling websites and five money-laundering studios to provide online gambling payment clearing services.  Apart from that, authorities seized mobile phones, credit cards, computers, vehicles, bank accounts, and numerous criminal business documents.

The investigation revealed that over 3,000 employees were involved in the scheme operating for over 15 months. The platform serviced over 120 foreign online gambling websites and 70 online investment frauds to the tune of 120 billion yuan ($17.9 billion).

Online gambling and USDT makes money laundering easy

The Chinese are fond of gambling. According to Statista, the gaming market's sales revenue in China experienced a ten-fold growth and exceeded 230 billion yuan, while the number of gamers exceeded 640 million in 2019. Many platforms allow users to pay with USDT, which is often used in a country as a US dollar substitute. 

The whole process of laundering ill-gotten RMB is as easy as that: the criminals purchase USDT with RMB on the platform and provide recharge QR-codes. The platform gathers the codes and provides them to the players who need to scan them with their mobile devices to recharge their gambling funds, purchasing USDT with RMB.

The scheme allowed laundering a large amount of money via online gambling platforms. 

China cracks down on cryptocurrencies ahead of digital yuan launch

As the FXStreet previously reported, the People's Bank of China proposed to directly prohibit companies and individuals from creating and selling tokens as a yuan substitute.

The draft proposal is published for public consultations. If it is approved, the authorities will be entitled to forfeit any proceeds from creating and selling yuan-backed digital tokens and impose a fine up to five times the involved proceeds.

At the same time, the country is moving towards the launch of digital yuan. 

Author

Tanya Abrosimova

Tanya Abrosimova

Independent Analyst

 

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