Tether’s USDT Implicated in $2B Illegal Foreign Exchange Scheme in China – Regulation Coming?
Chinese police in Sichuan province apprehended some suspects of an underground banking scheme on May 15 for allegedly facilitating illicit foreign exchange transactions involving about $2 billion worth of Tether’s USDT.
According to a report from Baijiahao.baidu, the Sichuan police arrested the suspects for allegedly using USDT to evade national foreign exchange supervision while providing illegal settlement channels.
The operation resulted in the shutdown of a major underground banking scheme involved in smuggling operations worth 13.8 billion Chinese yuan, equivalent to about $1.9 billion. USDT was revealed to have been the conduit for the illicit transactions.
The scheme spanned 26 provinces across China, including municipalities and autonomous regions. The police arrested over 90 suspects associated with the scheme.
The police in Sichuan, China, which was once the center of Bitcoin mining, uncovered an underground bank case involving more than 1.9 billion US dollars, using USDT to smuggle medicines and cosmetics and help customers purchase assets overseas. 193 suspects were arrested.…
— Wu Blockchain (@WuBlockchain) May 15, 2024
Stablecoins like USDT are often exploited to bypass foreign exchange supervision due to their price stability and anonymity of cryptocurrency, making them suitable for storing and transferring funds without the risk of price fluctuations.
This latest arrest of suspects using illicit foreign exchange transactions follows a similar event in the arrest of Cartier’s heir, Maximilien de Hoop Cartier, by the US Department of Justice (DoJ).
The DoJ’s indictment revealed that Hoop Cartier allegedly collaborated with a Colombian drug cartel to import 100 kilos of cocaine and laundered hundreds of millions of
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