What To Know:
- A Beijing court sentenced five individuals to two–four years in prison for conducting illegal cross-border crypto transactions worth over $166 million using Tether (USDT).
- The group converted client funds into USDT to bypass China’s capital controls, disguising the transfers as legitimate crypto trading.
- The verdict marks one of China’s most detailed crackdowns on crypto-linked forex crimes, as authorities tighten oversight of illicit fund movements worldwide.
A China court has handed down prison sentences ranging from two to four years to five individuals involved in a huge illegal foreign exchange operation through cryptocurrency transactions worth $166M. The group was found guilty of converting client funds into Tether (USDT) and transferring them across borders. The group disguised the movement as legit crypto trading.
China Cracks on Illegal Cross-Border Crypto Transactions
Between January and August 2023, the accused, who is identified as Lin A, Lin B, Xia, Bao, and Chen, used multiple bank accounts registered under their names to receive large amounts of Chinese yuan (RMB) from clients connected to an underground foreign exchange network. As per a local media report, the group then acting on instructions from higher-level operators, the group transferred these funds into USDT through several Tether trading platform accounts they secretly controlled. The tokens were then exchanged and moved abroad, after bypassing China’s strict capital controls.
Investigators revealed that the operation facilitated transactions exceeding RMB 1.182 billion (approximately $166 million). Among the five convicted, individual participation ranged from RMB 149 million to over RMB 469 million. The defendants earned profits from these transactions as they hid their true purpose under the pretext of crypto trading.
On December 25, 2024, prosecutors in Beijing’s Haidian District charged the five for illegal business operations. The Haidian District People’s Court delivered its verdict on March 21, 2025. The court sentenced each to two to four years in prison, along with financial penalties. All five admitted guilt and accepted the court’s ruling, and so the decision took immediate effect.
Officials said such crimes often combine traditional illegal forex trading with the anonymity and global reach of digital assets, making them harder to trace and prosecute.
The Beijing Procuratorate developed a specialized investigative and evidentiary framework to address these challenges. Prosecutors pointed out that the high level of concealment in crypto transactions, along with difficulties in collecting cross-border data, required a new approach to case handling. By comparing time-stamped data from bank and crypto exchange accounts, investigators were able to discover irregular fund flows, identify trading patterns, and confirm the defendants’ roles in facilitating illegal foreign exchange activities.
Authorities rejected the defense’s claims that the transactions were merely “crypto speculation.” Comprehensive evidence, i.e, transaction histories and communication records, showed clear intention to engage in unlicensed currency exchange. The court said that the defendants deliberately conducted illegal foreign exchange operations and profited from them.
Given the scale and cross-border nature of the case, prosecutors executed a plan described as “technical empowerment plus standardized review.” The verdict represents one of the most detailed rulings yet in China’s ongoing crackdown on crypto-linked financial crimes. Prosecutors say the judgment offers guidance for handling cases where cryptos are used to hide the illegal flow of capital.
In recent years, Beijing’s judicial bodies have intensified actions against economic crimes involving digital assets, fraud, and illegal forex activities. The Procuratorate reaffirmed its focus on precision in financial crime investigations and efficient case handling. Officials said maintaining legal control over emerging financial technologies remains central to ensuring economic stability and safeguarding national financial security.
Even with its foundation in decentralization and financial freedom, the crypto space continues to be exploited for illicit purposes. In a related development, Israel’s Ministry of Defense recently seized nearly 180 digital wallets tied to the Islamic Revolutionary Guard Corps (IRGC), which is designated as a terrorist organization by the United States, the United Kingdom, and Israel.
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