Shanghai police have released a statement on this underground money-changing case worth nearly RMB 20 billion. A few details are worth the attention of practitioners.
Since August 2024, the gang has used virtual currency as the settlement medium, linking the “RMB—virtual currency—foreign currency” chain. In essence, they used USDT as an offset/over-the-counter matching tool. Once the flow of funds is penetrated, the account holders are very likely to be implicated in illegal business activities and crimes of assisting in information network activities.
Another case is even more typical: a technology company was set up, and a cross-border remittance plus a virtual credit card settlement platform was used. On the surface, it looked like legitimate cross-border payments, but in reality it was illegal foreign exchange trading wrapped in a “technology” façade, with the amount involved exceeding RMB 200 million.
In both cases combined, more than 70 people were arrested and dozens were approved for prosecution. The message is very clear: the regulatory crackdown is not focused on individuals holding virtual assets, but rather on large-scale foreign exchange trading, settlement, and matching activities that use virtual assets as the intermediary.
Here are three reminders for the industry:
1. Business dealers and OTC offsetting/matching operations carry extremely high risk—the compliant route is the way forward.
2. For “technology company + virtual card settlement” setups like this, regulators can already penetrate the packaging accurately. Don’t entertain any sense of luck or chance.
3. For two-way conversion between RMB and foreign currencies, you must use channels provided by licensed institutions.
Crypto compliance red lines are becoming clearer and clearer, and the cost of operating at the margins will only keep rising.
#虚拟货币 #anti-money-laundering
Since August 2024, the gang has used virtual currency as the settlement medium, linking the “RMB—virtual currency—foreign currency” chain. In essence, they used USDT as an offset/over-the-counter matching tool. Once the flow of funds is penetrated, the account holders are very likely to be implicated in illegal business activities and crimes of assisting in information network activities.
Another case is even more typical: a technology company was set up, and a cross-border remittance plus a virtual credit card settlement platform was used. On the surface, it looked like legitimate cross-border payments, but in reality it was illegal foreign exchange trading wrapped in a “technology” façade, with the amount involved exceeding RMB 200 million.
In both cases combined, more than 70 people were arrested and dozens were approved for prosecution. The message is very clear: the regulatory crackdown is not focused on individuals holding virtual assets, but rather on large-scale foreign exchange trading, settlement, and matching activities that use virtual assets as the intermediary.
Here are three reminders for the industry:
1. Business dealers and OTC offsetting/matching operations carry extremely high risk—the compliant route is the way forward.
2. For “technology company + virtual card settlement” setups like this, regulators can already penetrate the packaging accurately. Don’t entertain any sense of luck or chance.
3. For two-way conversion between RMB and foreign currencies, you must use channels provided by licensed institutions.
Crypto compliance red lines are becoming clearer and clearer, and the cost of operating at the margins will only keep rising.
#虚拟货币 #anti-money-laundering