Cross-Border Financial Crime Uncovered
A court in Beijing, China, has sentenced five individuals to prison for their involvement in a scheme that utilized the stablecoin USDT to facilitate secret cross-border money transfers. The group disguised their activities as cryptocurrency trading to circumvent China’s strict foreign exchange controls.
According to local reports, this case is among 13 representative financial crime rulings released by the Beijing Municipal People’s Procuratorate for 2024–2025. The list encompasses several significant areas, including banking, insurance, securities, credit, and foreign exchange management.
Operational Details of the Scheme
The case details, disclosed at the 2025 Financial Street Forum, indicate that the group operated from January to August 2023. They used personal bank cards to receive substantial amounts of renminbi (RMB) from domestic clients who wished to move funds abroad. Subsequently, these funds were converted into USDT on various cryptocurrency trading platforms and then transferred to offshore wallets, effectively establishing the stablecoin as an informal channel for settlements.
Investigators revealed that two defendants, both surnamed Lin, were the masterminds behind the operation. The remaining defendants, identified by the surnames Xia, Bao, and Chen, were responsible for managing transactions and coordinating accounts. The scheme facilitated the transfer of over 1.18 billion yuan, which is approximately USD 166 million. Each member of the group was involved in transactions amounting to at least 149 million yuan.
By converting RMB into USDT and sending it overseas on behalf of clients, the group operated an unlicensed cross-border transfer service. Their profit was generated from the price difference between domestic RMB rates and offshore USDT rates.
Court Verdict and Investigative Methods
The Haidian District People’s Court determined that the group was engaged in an underground foreign exchange operation and convicted them of "illegal business operations." The sentences handed down range from two to four years in prison, along with financial penalties. All five defendants pleaded guilty and did not file appeals.
Given that the money trail extended through overseas crypto exchanges, prosecutors had to employ a more technical approach to the investigation. Digital forensics teams played a crucial role in verifying data extracted from the trading platforms. They meticulously reconstructed the complete flow of the transfers, tracing the funds from their receipt in Chinese bank accounts to their conversion into USDT and subsequent movement offshore.
This comprehensive end-to-end tracking enabled authorities to accurately assess the scale of the operation and impose appropriate sentences. Officials have stated that this case will serve as a precedent for future investigations, particularly as financial crimes increasingly incorporate cryptocurrencies and international platforms.