Chinese Authorities Bust $295M Underground Cryptocurrency Exchange

Chinese Authorities Bust $295 Million Underground Cryptocurrency Exchange

Chinese authorities have busted an underground bank involved in illegal currency exchanges between Chinese yuan and South Korean won. The operation, which used cryptocurrency, is estimated to have processed transactions worth at least 2.14 billion yuan (about $295.8 million).

According to a report in state media, local police in Jilin province in Northeast China said the criminal group used local bank accounts to receive and transfer funds using over-the-counter cryptocurrency transactions. Its services were primarily sought by various organizations, including South Korean purchasing agents, cross-border e-commerce platforms, and import and export trading firms, to facilitate foreign exchange exchanges between Chinese yuan and South Korean won.

Six suspects responsible for facilitating illegal activities in both China and South Korea have been arrested. The suspects allegedly took advantage of cryptocurrencies, which allow anonymity of transactions and a decentralized structure, to carry out illegal foreign exchange transactions.

China has long maintained strict capital control measures and encouraged individuals to seek alternative ways to circumvent these regulations. Cryptocurrencies are often used as a way to get around these rules, providing a decentralized and less regulated platform for conducting financial transactions.