Chinese Authorities Bust $295M Underground Cryptocurrency Exchange

Chinese authorities have cracked down on an underground bank involved in illegal currency exchange operations between the Chinese yuan and the South Korean won. The operation, which utilized cryptocurrency, is estimated to have handled at least 2.14 billion yuan (approximately $295.8 million).

According to a report from state media, local police in Jilin province, located in Northeast China, the criminal group employed domestic bank accounts to receive and transfer funds, utilizing over-the-counter cryptocurrency transactions. Their services were primarily sought by various entities, including South Korean purchasing agents, cross-border e-commerce platforms, and import and export trade firms, to facilitate currency exchanges between the Chinese yuan and the South Korean won.

Six suspects responsible for facilitating the illicit activities in both China and South Korea were arrested. The suspects allegedly took advantage of cryptocurrencies, which allowed transaction anonymity and decentralization, to carry out illegal foreign currency exchange operations.

China has long maintained strict capital control measures, prompting individuals to explore alternative avenues to bypass these regulations. Cryptocurrencies have often been utilized as a means to circumvent these rules, offering a decentralized and less regulated platform for conducting financial transactions.