This underground bank uses virtual currency as a medium to engage in illegal foreign exchange operations (1) (from CoinsRadar.net):

Chen Mouguo and others set up an illegal exchange website, using the method of collecting foreign currency in overseas accounts and paying RMB in domestic accounts to make profits from foreign exchange transactions. So, using virtual currency as a medium to achieve cross-border conversion of RMB and foreign currencies is a new type of illegal foreign exchange buying and selling behavior... …"After foreign currency exchange customers place orders through the website's value storage, payment and other business sections, they pay foreign currency to the designated overseas account. After that, we use the overseas account to purchase virtual currency in foreign currency, sell the virtual currency domestically, and pay the customer at the agreed exchange rate The designated domestic third-party payment platform account pays the corresponding amount of RMB and earns exchange rate differences and service fees." According to gang member Guo Mouzhao's confession after arriving at the case, this underground bank used virtual currency as a medium to engage in illegal foreign exchange operations and disrupt the financial industry. Management order. On June 27, 2022, after a public prosecution was launched by the Shanghai Baoshan District Procuratorate, the court sentenced Guo Mouzhao and Fan Mouzhen to five years' imprisonment and three years and three months' imprisonment respectively for the crime of illegal business operations, and each was also fined; in order to help For the crime of information network criminal activities, Zhan Mouxiang and Liang Mouzuan were sentenced to one year and six months in prison and ten months in prison respectively, and were also fined. On December 27, 2023, the Supreme People's Procuratorate and the State Administration of Foreign Exchange jointly released typical cases for punishing foreign exchange-related crimes. There are 8 typical cases in this batch, which mainly involve cross-border blackmail-type illegal foreign exchange transactions. This case is one of them.

Account changes lead to underground banks

There are abnormalities in the transactions in this account, which may involve domestic and foreign virtual currency transactions..." In May 2021, the public security agency received the transferred clues that a bank account had a total of more than 20,000 transactions from January 2018 to April 2021. Nearly one-fifth of the transactions occurred in the early morning and late at night, and the flow of transaction funds was to purchase virtual currencies and then transfer the funds overseas. After investigation, the public security agency found that there were many similar accounts. According to the account holders, one Underground banks that use virtual currencies to conduct illegal foreign exchange settlements for others have surfaced. According to relevant regulations, each person has a foreign exchange limit of US$50,000 per year. Therefore, some people began to look for informal and illegal foreign exchange methods, and underground banks emerged. "Broad market".Underground banks refer to institutions that engage in activities such as cross-border remittances and fund payment and settlement businesses without the approval of the competent national authorities. As the boss, Chen Mouguo (handled in another case) opened a company to collect foreign currency by providing recharge and other services to overseas customers. He then used the foreign currency to buy virtual currencies, which were sold by Fan Moujuan and others through illegal channels in exchange for RMB, and then transferred the RMB to Domestic accounts of overseas customers. In this way, the currency exchange is completed.

Intervene in advance to guide and track capital exchange links

"According to the provisions of the "Measures for the Suppression of Illegal Financial Institutions and Illegal Financial Business Activities", such institutions that are established without the approval of the People's Bank of China to engage in financial business activities such as absorbing public deposits, granting loans, and financing guarantees are illegal financial institutions. , and the perpetrator uses virtual currency as a medium to achieve cross-border conversion of RMB and foreign currencies, which is a new type of illegal foreign exchange buying and selling behavior." On September 18, 2021, the Baoshan District Procuratorate intervened in the case in advance according to the law, linking the public security organs, the National Foreign Exchange After many discussions and evaluations of the nature of the case, the management department and others concluded that “such behavior makes the corresponding foreign exchange transactions out of supervision and directly jeopardizes the order of financial management.”

In October 2021, the prosecutor handling the case interrogated the criminal suspect. Since most of the currency exchange customers and accounts were overseas, it was difficult to obtain testimony and the flow of funds was difficult to verify. Therefore, the procuratorial organs and public security organs have focused on identifying cross-border financial links as the key to collecting and consolidating evidence. In order to establish the criminal behavior pattern of underground banks, the procuratorate guided the public security organs to conduct investigations and evidence collection, and focused on interrogating the personnel involved in the division of labor and profits by obtaining back-end account information, order records, bank transaction details, and third-party payment platform transaction records of underground bank websites. methods, as well as the operation methods and profit-making funds of each link, to find out one by one the cross-border circulation model of the funds involved in the case "foreign currency-virtual currency-RMB" and the degree of participation of each actor. "This case involves three currency flows: foreign currency, virtual currency, and RMB. Therefore, how to track the interconnected links of cross-border funds is the focus." According to the prosecutor, since the three currency flows usually do not occur simultaneously, upon the recommendation of the prosecutor's office, the public security agency investigated We took the recharge and withdrawal transaction records of the virtual currency trading platform and compared them with the transaction hash value, transaction time and quantity of the virtual currency in the backend data of the exchange website, and confirmed that the three currency flows of foreign currency, virtual currency, and RMB are all generated by the same currency. Gang manipulation, thereby identifying the fund conversion process and the amount of the crime.

Set up a website and operate the entire chain of underground banks

After investigation, the public security agency discovered that in this underground bank, in addition to the boss Chen, Guo Mouzhao was responsible for setting up an illegal exchange website and conducting daily maintenance and operation. As technical personnel of the company, Guo Mouzhao and Chen Mouguo single-handedly planned and set up the website. When there are problems such as orders not being displayed, orders being unable to be submitted, or receiving bank accounts not being displayed in the backend of the website, or when the website needs maintenance, Guo Mouzhao will handle it. "The website is aimed at overseas customers, and it mainly provides services such as third-party payment platform recharge, shopping payment, video software recharge and other services." Guo Mouzhao explained that after overseas customers register as members on the website, they store value and make payments through the website. Wait for the business section to place an order and pay in foreign currency. After Chen Mouguo and others converted the foreign currency into RMB through virtual currency, the customer service then transferred the RMB to the customer through a third-party payment platform to complete the recharge service. For shopping payment, the customer selects the item on the shopping account and clicks the "Find someone to pay for it" function, and sends the link to the customer service, who then uses the converted RMB payment to complete the transaction. Similar operations are performed for mobile phone, game, live broadcast recharge and other businesses. According to the prosecutor, in addition to technical personnel, the case also involves finance, customer service personnel who deal with customers' orders, and staff who deal with the purchase and sale of virtual currencies. The conversion of virtual currency into RMB is done through Fan Moujuan and others. "My husband, I, and several relatives formed a team to engage in the trading of virtual currencies. Chen Mouguo often sells virtual currencies to us. He sells a large amount of coins, which can reach several million yuan in RMB equivalent. He is a big customer." According to the report. Fan Moujuan confessed that the virtual currency accounts and bank accounts required for virtual currency trading activities were opened by him with relatives and friends such as Zhan Mouxiang and Liang Mouzuan.