In a recent legal verdict, a court in Tongliang, China, near Chongqing, convicted 21 individuals for their involvement in a complex scheme to convert proceeds from online frauds and illegal casinos, transacted in Tether (USDT), into Chinese Yuan (RMB), totaling approximately 2.25 billion RMB or $307 million.
The court identified the main actors as Jiang and Zheng, who recruited 19 others, termed as “money mules.”
Jiang, one of the key figures, profited 22.62 million RMB ($3 million) from the operation. The court found the group guilty of disguising and concealing criminal proceeds, resulting in various prison terms and fines. Jiang was sentenced to six years, three months imprisonment, and a 500,000 RMB fine, while Zheng received the same fine and a six-year prison term.
Although the court did not explicitly specify the origin of the USDT, it noted that Tether is a popular digital asset among fraudulent networks operating in Southeast Asia.
The group used Bitpie wallets to launder USDT obtained from various online crimes, including fraud and online gambling. To avoid detection, they executed transactions at prices deviating significantly from market rates. The ill-gotten gains were funnelled through offline Bitpie collection wallets and sold on virtual currency trading platforms. The group fabricated reasons such as withdrawing project funds and migrant workers’ wages to legitimise cash withdrawals across multiple provinces and cities.
The funds, ranging from hundreds of thousands to several million yuan per withdrawal, were transported via plane to destinations in Fujian Province, with each transfer amounting to tens of millions of yuan. The group transferred over 2.25 billion yuan ($300 million) to overseas entities, with cumulative profits exceeding 22.62 million yuan.
Jiang received a prison sentence of six years and three months, coupled with a 500,000 RMB fine, while Zheng was sentenced to six years in prison and the same fine. The remaining 19 individuals involved received fixed-term imprisonment sentences ranging from one to two years and six months, alongside monetary fines.