Breaking! Is USDT exchange illegal?

In fact, everyone's daily capital inflow and outflow activities are consistent with the case below.

In October, the Beijing procuratorate published a typical financial prosecution case, where an illegal foreign exchange operation using USDT as a medium shocked the industry: the involved funds reached 11.82 billion yuan, and 5 defendants were sentenced to 2 to 4 years for illegal business operations.

The key value of this case is not just about the "huge amount"; it clearly defines the criminal boundary of "cross-border exchange of virtual currency" for the first time: the core of the judicial authority's judgment is never about whether "virtual currency is considered currency", but rather whether the behavior circumvents foreign exchange regulations to achieve illegal conversion between renminbi and foreign currencies.

For a long time, such behaviors have frequently operated in OTC circles and among cross-border capital demand groups under the disguise of "technical intermediaries" and "hidden transactions".

The actions of Lin and others are by no means a simple "buying and selling of USDT". From the perspective of capital flow, its essence is a complete financial attribute of a "substitutive cross-border payment system", specifically structured into four steps:

1. Starting point: Renminbi funds from the domestic demand side (transferred through personal bank accounts);

2. Conversion stage: Directly purchase USDT with renminbi on domestic virtual currency platforms (completing the "fiat currency to virtual currency" conversion);

3. Cross-border stage: Transfer USDT to overseas virtual currency platforms using cross-chain technology;

4. Endpoint: Exchange USDT for equivalent foreign currency on the overseas platform and transfer it to an overseas bank account.

This entire path completely circumvents the statutory foreign exchange regulatory system, avoiding the restrictions of "personal annual foreign exchange purchase limit of 50,000 USD", and has not gone through banks.

From a regulatory logic perspective, the technical form of virtual currency is irrelevant. As long as it is used for "currency exchange" or "cross-border capital transfer", the nature of the behavior reverts to the realm of "traditional financial activities" and must comply with statutory regulatory rules.

Virtual currency itself is not a risk; the transaction structure is the risk. As long as the structure touches the bottom line of "unauthorized cross-border exchange", regardless of whether the participants subjectively believe they are engaging in "virtual currency trading", the criminal risk will not be mitigated.