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China Jails Five for $166M Crypto Money Laundering Scheme

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A Beijing courtroom has sentenced 5 people to jail phrases starting from two to 4 years for working an unlawful international trade operation that moved over $166 million by crypto channels

As regulators described, this marks one in every of China’s most important prosecutions of crypto-enabled monetary crime, as authorities intensify their crackdown on digital asset exercise.

The case, unveiled on the 2025 Financial Street Forum Annual Meeting on October 28, notably reveals Beijing’s rising sophistication in monitoring and prosecuting cross-border crypto transactions amid broader warnings from Chinese officials about stablecoins threatening global financial stability.

Between January and August 2023, the group orchestrated a fancy operation changing consumer funds into USDT stablecoins to facilitate unlawful cross-border transfers, processing 1.182 billion yuan ($166 million) by a number of accounts.

The Beijing Municipal People’s Procuratorate detailed how the scheme used digital foreign money as a “bridge” for disguised international trade buying and selling, with particular person members dealing with quantities starting from 149 million to 469 million yuan.

Advanced Forensics Crack Crypto Money Trail

Lin Jia led the operation underneath directions from unnamed events, collaborating with Lin Yi, Xia, Bao, and Chen to funnel consumer funds by a number of financial institution accounts registered of their names.

The group transformed incoming yuan funds into USDT by numerous Tether buying and selling platform accounts underneath their management, then accomplished cross-border transfers by platform transactions whereas taking advantage of every trade.

The prosecution deployed specialised technical strategies to beat the inherent challenges of crypto investigation, combining monetary information evaluation with blockchain transaction tracing.

Investigators in contrast temporal correlations between conventional financial institution accounts and digital foreign money buying and selling accounts, figuring out suspicious patterns in fund flows that contradicted defendants’ claims of professional “crypto hypothesis.”

The procuratorate remotely examined information from abroad platforms to confirm evidence-collection procedures, guaranteeing authorized compliance whereas constructing their case.

This “full protection” strategy solved what prosecutors known as the “proof assortment dilemma” in cross-border financial crimes involving each capital and personnel throughout a number of jurisdictions.

The Haidian District People’s Court delivered its first-instance judgment on March 21, 2025, with all 5 defendants accepting their sentences with out attraction.

The case offered authorities with what they described as “key judicial follow references” for dealing with related crypto-related monetary crimes in an more and more digital world.

Beijing Escalates Stablecoin Warnings

Pan Gongsheng, governor of the People’s Bank of China, issued stark warnings on the similar Financial Street discussion board, calling stablecoins a risk to world monetary stability and financial sovereignty.

“Stablecoins, as a type of monetary exercise, nonetheless can’t meet the fundamental necessities of economic supervision,” Pan acknowledged, citing failures in buyer identification and anti-money laundering compliance.

The central financial institution chief emphasised that stablecoins “have amplified weaknesses within the world monetary system” and expose vulnerabilities for terrorist financing and cash laundering.

Pan confirmed that the PBoC would preserve its zero-tolerance coverage towards personal digital currencies whereas intently monitoring developments within the abroad stablecoin market.

These warnings come as stablecoin markets reached round $310 billion in capitalization, with Tether and USD Coin accounting for about 84% of the mixed provide (59% and 25%, respectively) and processing over $46 trillion in settlements yearly.

China Jails Five for $166M Crypto Money Laundering Scheme
Source: DefiLlama

Tech Giants Forced to Abandon Hong Kong Stablecoin Plans

Ant Group and JD.com halted their stablecoin issuance plans in Hong Kong following direct directions from the PBoC and Cyberspace Administration of China in mid-October.

Officials instructed each firms that the precise to difficulty foreign money should stay solely with the state, not personal enterprises.

The intervention reversed earlier momentum, as Ant had introduced in June plans to pursue stablecoin licenses in Hong Kong, Singapore, and Luxembourg.

Despite the setback, Ant filed trademarks in Hong Kong for virtual assets and blockchain technology, together with “ANTCOIN,” whereas its Whale blockchain platform processed one-third of worldwide cost transactions valued at over $1 trillion final yr.

In August, Chinese regulators ordered brokerages and analysis establishments to cease publishing studies or internet hosting seminars selling stablecoins, citing fraud and speculative dangers.

Meanwhile, the Chinese authorities seems to be the limiting issue to adoption.

Last month, Hong Kong’s stablecoin licensing regime attracted 77 expressions of interest from banks, expertise companies, and Web3 startups, with the Hong Kong Monetary Authority conducting preliminary conferences whereas cautioning that solely restricted licenses could be authorised initially.

The publish China Jails Five for $166M Crypto Money Laundering Scheme appeared first on Cryptonews.

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