• Home


  • News


  • China Pushes Down On Widespread Tether - Related Money Laundering

China Pushes Down On Widespread Tether - Related Money Laundering

  • Author

    Coinhunt CC

  • Reading time

    5 min read

  • Published



Tether, a stablecoin backed by the yuan, has been the target of a crackdown by the Chinese central bank. The bank has stated that the sites are put up outside of China and use the USDT to bypass China's rigorous capital controls.


A WeChat blog post by the People's Bank of China (PBoC) outlined the bank's recent efforts to combat China's unlawful online gambling market. The bank has been supporting local authorities in tracking down the influx of money into these gaming sites in conjunction with the bank. The regulator stated that tethering is one of the most common tactics used by gamers. When the PBoC's Huizhou City branch discovered a cross-border online gambling enterprise using USDT to transfer payments, it went into detail. Local officials tracked out 77 people and shut down three gambling sites as a result of their investigations. In addition, they were able to recover $17.9 million in stolen property.


"Multiple layers" were used by the operators to hide the USDT's passage, according to the watchdog. Another time, the bank's actions led to the closure of a gambling site that was purportedly processing $390 million. The bank issued a warning to the public against internet gaming. Cross-border gambling cash movement is unlawful in its core. Both the outflow of betting money and the repatriation of unlawful gains have the same goal in mind: hiding the source and nature of the illegal earnings. Despite the fact that it has been illegal in China for more than seven decades, online gambling is nevertheless a major source of concern for the authorities.


According to a report by the Japanese news site Coinpost, China's e-gambling industry loses $150 billion a year to foreign competition. The site cited a Chinese Ministry of Public Security official to assert that digital currencies are used to transmit a significant portion of these funds. In order to combat digital currency fraud in China, the People's Bank of China (PBoC) has implemented a recent USDT crackdown. The bank has been cracking down on OTC marketplaces recently in this area. OTC platforms, as shown here, play a major role in the purchase of digital currencies by Chinese nationals, because digital currency exchanges are outlawed. The Asian country's authorities have started holding OTC traders and platform owners to help with investigations, as CoinGeek revealed in early 2020.


According to the authorities, the traders have helped them with their investigations into digital currency money laundering. Prominent Chinese trader and Bitfinex investor Zhao Dong was among those detained by Chinese authorities.

China And Cryptocurrencies

Chinese officials originally declared war on cryptocurrencies in 2013, warning that they would eventually enter the banking system. The People's Bank of China said on December 5, 2023, that banks are prohibited from facilitating transactions linked to cryptocurrencies. Officials in China have said that virtual currency is a commodity and does not have any legal control from the government, according to a statement. There is no nation-state behind cryptocurrencies, and this was a major factor in the ban on bitcoin. It is also possible to launder funds using these shops.


Look at stablecoins if you're looking to invest in crypto trading. China's central bank researched cryptocurrencies in an effort to prevent money from flowing out of the nation illegally. Cryptocurrency exchanges involved in FX management and anti-money laundering were the focus of the inquiry, which began in January 2017. As of September 4, 2017, initial coin offers (ICOs) in China were completely outlawed. These initial coin offerings (ICOs) were crucial since the company relied on them heavily when starting out to raise capital. These tokens may be sold by businesses to generate money by producing and releasing them on the market themselves.


Cryptocurrency mining has been deemed a highly desired industrial sector activity by the country's national development and reform commission in 2019. Furthermore, cryptocurrency mining activities must be strictly regulated in order to avoid conflict with local authorities. As a result, bitcoin mining is seen as a computer-intensive operation that also has a negative impact on the environment. In 2021, China had an issue with the business, and in May of that year, the nation prohibited cryptocurrency mining and trade.


There were concerns that cryptocurrencies may threaten the stability of the country's financial system, according to the reports. As stated by the State Council, everyone interested in getting into cryptocurrency mining would get a significant quantity of energy, but at a very high cost. The profitability of any cryptocurrency mining enterprise will be reduced, and so, mining activities will go up and down as a result. Bitcoin miners were subject to onerous laws and restrictions, as well as severe fines. In addition, they impose steep fines on anybody found dealing in cryptocurrency, particularly Bitcoin (BTC). It resulted in a full banning of bitcoin mining and trading activity inside China's borders.


On January 4th, 2022, China unveiled its experimental digital yuan. e-CNY, a mobile app for using digital money, is available on both the Android and Apple app stores. To ensure a smooth rollout throughout China, the app is now only available to a small group of customers, such as Chinese banks. Tencent Holdings Limited (TCEHYWeChat, )'s China's most popular messaging app with over 1 billion users, also offers the digital yuan. In contrast to China's prior intentions to distribute digital yuan via a lottery, China has decided to distribute digital yuan throughout the country instead. It stated in June 2021 that it will provide $6.2 million in lottery prizes to Beijing residents. China's southwest city of Chengdu announced in February 2021 that it will donate $6 million in digital yuan.