Trader was convicted of a $16.5 million USDT laundry scheme

A Sunwu County court has ruled against a cryptocurrency trader identified as Xiao Yang, who promoted money laundering operations through USDT (Tether) transactions. The case is one of 12 cryptocurrency-related lawsuits heard by the court in 2024.

According to court documents, Xiao Yang used Wechat, an instant messaging app, to connect buyers and sellers of USDT, commonly referred to as the Chinese “U-coin.” Operating at a price difference of 1-6 cents compared to the OKX Exchange (formerly OYI) rate, Xiao Yang processed the transaction by transferring payment information between the parties and using a personal TP wallet as an intermediary.

Within three months, Xiao Yang processed nearly 10,000 USDT transactions, including almost 10,000 different payment accounts. During the investigation, it was revealed that he had processed 30.3 million USDT tokens and the amount of the transaction amounted to 120 million yuan (approximately $16.5 million). These businesses have generated illegal profits of more than Xiao Yang’s 440,000 yuan (approximately $60,000).

Related: Korean man wins 7 years with $311 million crypto scheme scam

Additionally, it has been discovered that Xiao Yang’s Internet money service is linked to seven wire fraud cases. His account received 59,000 yuan for fraud and helped him transfer 116,000 yuan of money. In total, it was found that Xiao Yang has hidden criminal funds of over 170,000 yuan.

Expressing regret over a crime can reduce punishment

The Sunwu court ruled that Xiao Yang was guilty of concealing and disguising money as a crime, and the court declared a “serious” lawsuit under Chinese law. He played a “minor role” as an accomplice in a bigger crime, but Xiao Yang was fined for criminal penalties. The court added that his decision to confess illegal money, express regret and return it could be viewed as a factor that reduces his punishment.

The case highlights the increasingly strict enforcement of China’s cryptocurrency ban. On September 15, 2021, several Chinese authorities, including the People’s Bank of China, the Central Cyberspace Commission, the Supreme People’s Court and the Supreme People’s Court, jointly issued a notice expressly declaring cryptocurrency-related business activities as “strictly prohibited and decisively prohibited” illegal financial operations.