A recent court ruling in Sunwu County has brought to light the illegal activities of a cryptocurrency trader named Xiao Yang, who was found guilty of facilitating money laundering operations through USDT (Tether) transactions. This case is just one of twelve virtual currency-related proceedings that the court has heard in 2024.
Xiao Yang was discovered to have used WeChat, a popular instant messaging app, to connect buyers and sellers of USDT, also known as “U-coins” in China. By operating with price differentials compared to rates on the OKX exchange, Xiao Yang processed transactions by acting as an intermediary, using his personal TP wallet to facilitate the exchanges.
Over a span of three months, Xiao Yang processed nearly 10,000 USDT transactions involving almost 10,000 different payment accounts. These transactions amounted to over 30.3 million USDT tokens, with a monetary value exceeding 120 million yuan (approximately $16.5 million). As a result, Xiao Yang profited illegally from these operations, earning over 440,000 yuan (approximately $60,000).
Furthermore, investigations revealed that Xiao Yang’s illicit internet money services were linked to seven telecom fraud cases. His accounts were used to receive fraud money and assist in transferring funds, leading to victims losing over 4.189 million yuan in scams. In total, Xiao Yang was found to have concealed criminal funds worth over 170,000 yuan.
The Sunwu Court found Xiao Yang guilty of concealing and disguising money as a crime, deeming the case as “serious” under Chinese law. Despite playing a minor role as an accomplice in a larger crime, Xiao Yang received a criminal penalty and was fined. The court noted that his confession, expression of remorse, and return of illicit money could potentially lead to a reduction in his punishment.
This case highlights China’s strict enforcement of virtual currency prohibitions. In September 2021, multiple Chinese authorities issued a notice declaring virtual currency-related business activities as illegal financial operations that are strictly prohibited.
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