As a crypto investor with experience living in China, I’m deeply concerned about the latest developments regarding large-scale underground banking schemes involving Tether’s stablecoin USDT. These crimes not only undermine the trust in the crypto industry but also pose significant risks to society and financial regulatory frameworks.
In Sichuan province, Chinese authorities have successfully broken up a significant underground banking operation linked to illicit smuggling activities worth approximately 13.8 billion yuan or $1.9 billion. According to recent reports from local media, this clandestine organization participated in various unlawful practices, utilizing Tether’s stablecoin USDT for facilitating the smuggling of pharmaceuticals, cosmetics, and procurement of prohibited goods abroad.
The clampdown aligns with China’s countrywide commemoration of “May 15” as the National Publicity Day against and for the Prevention of Economic Misconduct.
The Dark Side of Sichuan’s Economy
At the recent finance conference in Chengdu Tianfu International Financial Center, I noted two significant cases brought up by the law enforcement officials. One of these cases exposed a sophisticated smuggling operation that had disguised itself as a local bank within the Sichuan region.
Sichuan, known for its massive Bitcoin mining operations prior to China’s crypto crackdown in 2021, is reportedly where perpetrators employed USDT stablecoin to bypass foreign exchange regulations. This allowed for clandestine foreign exchange transactions across the Chinese landscape, spanning 26 provinces, municipalities, and autonomous regions.
As a crypto investor, I’ve come across some shady characters who promised to help transfer funds overseas using Tether (USDT). But here’s the catch – they were part of an underground banking scheme that fraudulently obtained tax refunds from the government through false reports. These illicit activities have significantly increased financial crimes in China, including fraudulent schemes, employment-related offenses, drug regulation interference, smuggling of prohibited goods, and credit card system tampering.
Based on the findings in the report, these actions caused substantial damage to society, leading to major disruptions in market and financial regulatory systems. The organization functioned from 2021 to 2023, commencing its operations as an import-export business.
Police Arrest 196 Suspects Involved in the Crime
As a crypto investor following the latest news, I’ve learned that law enforcement agencies have taken significant actions against cryptocurrency-related crimes. Nationwide, they’ve detained 193 suspects in major cities like Shanghai, Changsha, Nanjing, Shenzhen, Fuzhou, and Jinhua. Among those apprehended are key figures Lin, Weng, and Chen, along with other unnamed individuals.
Last year, I was part of a joint task force that included the Economic Investigation Bureau of the Ministry of Public Security and the Economic Investigation Corps of the Sichuan Provincial Public Security Department in China. Together, we were responsible for making several arrests related to crypto crimes.
During the apprehensions, law enforcement officials seized approximately 149 million yuan from the suspected criminals, along with bank cards, U-shields, and other tools utilized for processing illegal transactions.
Last November, I learned that the investigation into the crypto case had been handed over to the Chengdu Municipal People’s Procuratorate for further examination and potential legal action.
Tax Fraud Exposed
During the event, it was brought up that the second instance of wrongdoing involved tax fraud. The perpetrators employed fake invoices to trick the authorities and illegally acquired approximately 137 million yuan in tax refunds.
In the year 2022, investigations by the police uncovered that a criminal organization, headed by Zhao Mouwei and Zhao Moutao, managed their illicit activities through multiple businesses they owned. These enterprises encompassed raw material procurement firms, biotechnology companies, and import-export trading entities.
Criminals utilized these facades to deceptively report processing and export transactions. They issued approximately 17,765 counterfeit value-added tax invoices at various levels, with a combined worth of 1.908 billion yuan.
The gang also engaged in deceitful foreign exchange dealings through clandestine banks, luring other businesses to join as investors and exporters, thus unlawfully acquiring approximately 137 million yuan in export tax refunds. Law enforcement agencies have managed to retrieve most of the stolen taxes, and the perpetrators were apprehended last year.
Read More
Sorry. No data so far.
2024-05-15 14:45