China Busts $300M USDT Money Laundering Ring

• A Chinese court has sentenced 21 individuals for laundering over $300 million worth of Tether stablecoins from online scams and illegal casinos.
• Defendants Jiang and Zheng orchestrated the scheme, involving 19 others, to launder 2.25 billion yuan ($307 million).
• They used the Bitpie wallet, similar to MetaMask, to transfer USDT to P2P exchanges and then converted it to yuan

A Chinese court has sentenced 21 individuals for their role in laundering over $300 million worth of Tether stablecoins from online scams and illegal casinos.

According to court documents, defendants Jiang and Zheng masterminded a scheme recruiting 19 others to launder 2.25 billion yuan ($307 million) in illicit USDT proceeds into Chinese yuan.

The group utilized the decentralized Bitpie wallet, similar to MetaMask, to transfer USDT to P2P exchanges and convert to yuan. They then falsely claimed the funds were for wages or project payments when withdrawing the fiat currency around China.

Jiang reportedly earned 22.6 million yuan ($3 million) for heading the operation and received 6 years of prison time plus a 500,000 yuan fine. Zheng got an identical fine and a 6-year term. Other defendants were sentenced to various fines and jail time.

Court didn’t specify the origin of USDT

While the court filing did not specify the USDT’s origin, Tether is commonly used by Southeast Asian fraud groups, as detailed in the recent crypto book “Number Go Up.”

China has waged an ongoing crackdown on crypto, banning trading and mining. But incidents like this highlight that digital assets still penetrate the country, particularly in the shadows of the law.

This sizable bust underscores China’s continued presence as a money laundering and fraud haven in the virtual asset space despite restrictions.

As Tether remains a dominant stablecoin, its role in enabling black market transactions persists as well. This case exemplifies the challenges of severing those links, even with outright prohibition.

For Chinese authorities, illicit crypto activity flowing across borders will require constant vigilance, coordinated global regulation, and transparency in transactions. But those remain distant goals in reality.