$2.2 Billion Illegal Forex Operation Busted by Chinese Authorities Using Crypto Platforms

Last updated: December 26, 2023 23:59 EST . 1 min read

Disclosure: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. By using this website, you agree to our terms and conditions. We may utilise affiliate links within our content, and receive commission.Source: Adobe / AlenChinese authorities have reportedly dismantled an illegal underground banking operation that moved some $2.2 billion between China and other countries using overseas “virtual currency trading platforms.”

On December 24, an account on social media app WeChat run by China’s State Administration of Foreign Exchange (SAFE), reported that an underground bank had used crypto to bypass forex restrictions.

In China, citizens are prohibited from exchanging more than US$ 50,000 worth of foreign currency each year, but it has long been known that crypto has been used to evade these restrictions.

Xu Xi, an inspector from the Qingdao Branch of SAFE, explained that underground banks purchased virtual currencies and subsequently sold them through overseas trading platforms to acquire the necessary foreign currency.

Source: China’s State Administration of Foreign ExchangeDuring on-site investigations, authorities seized cryptocurrencies valued at $28,000 (200,000 Chinese yuan), including Tether (USDT) and Litecoin (LTC).

The underground bank’s operation reportedly spanned a thousand bank accounts across 17 Chinese provinces and municipalities.

Source: China’s State Administration of Foreign ExchangeBoth mining and general use of crypto is banned in China, and some observers believe the real reason behind the ban is the country’s capital controls, which were implemented in 2016.