China Cracks Down On $1.9 Billion Underground Bank Using USDT For Foreign Exchanges

The Chinese hardline stance on cryptocurrency transactions has yet again come to the fore, with a prolific black market institution being dismantled by authorities yesterday. The news comes just days after Chinese police busted another bank using crypto for foreign exchange. 

The nation’s crackdown on crypto started in 2021, slowly becoming a blanket ban preventing anything crypto-related whatsoever. Interestingly, Hong Kong has taken an alternate position, intending to become the Asian hub for crypto innovation and recently approving spot Bitcoin and Ether ETFs.

Related: North Korean Hackers Unleash New ‘Durian’ Malware to Target South Korean Crypto Firms, Reveals Kaspersky Report

ForEx and “Smuggling Medicine” Keys to Illegal Bank

The unlawful bank had reportedly been operating since 2021, around the time China’s sweeping bans on the crypto sector rolled in. For the most part, the institution used Tether USD (USDT) – a stablecoin pegged to the US dollar – to facilitate exchanging Chinese yuan for international currencies.

However, authorities also reported that the bank was predominantly used by other criminals to help smuggle medicine and other illegal goods overseas.

The bank allegedly facilitated some CNY$13.8b (AU$2.86b) worth of transactions over the past three years, and nearly 200 suspects were arrested all over China due to their potential involvement in the illegal activity.

Chengdu City Police’s report also claimed that authorities froze CNY$149m (AUD$30m) of assets held by those running the bank.

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