USDT’s Role in China’s $166M Crypto Money Laundering Case Highlights Regulatory Focus

In a landmark case unveiled at the 2025 Financial Street Forum Annual Meeting, Beijing authorities have demonstrated significant advancements in tracking cryptocurrency transactions through the prosecution of a major money laundering operation. Five individuals received prison sentences ranging from two to four years for operating an illegal foreign exchange scheme that moved over $166 million through digital asset channels, primarily utilizing USDT and other cryptocurrencies. The operation, which ran from January to August 2023, involved converting client funds into cryptocurrencies for cross-border transfers, highlighting both the persistent use of digital assets in illicit finance and China's evolving capabilities in monitoring such activities. This case represents a crucial development in regulatory oversight of cryptocurrency transactions, particularly those involving stablecoins like USDT, which have become increasingly prominent in cross-border financial movements. The successful prosecution underscores Beijing's commitment to maintaining financial sovereignty while adapting to the challenges posed by decentralized digital currencies. As global cryptocurrency adoption continues to grow, this case serves as a significant precedent for how authorities worldwide might approach the regulation and monitoring of digital asset transactions, especially those involving substantial sums and potential money laundering concerns. The sophistication displayed by Chinese regulators in tracking these transactions suggests a new era of crypto surveillance capabilities that could reshape how digital assets are used and regulated internationally.

China Jails Five for $166M Crypto Money Laundering Scheme

A Beijing court has sentenced five individuals to prison terms ranging from two to four years for operating an illegal foreign exchange operation that moved over $166 million through crypto channels. The case, unveiled at the 2025 Financial Street Forum Annual Meeting, underscores Beijing's growing sophistication in tracking cross-border crypto transactions.

Between January and August 2023, the group converted client funds into USDT stablecoins to facilitate illegal cross-border transfers, processing 1.182 billion yuan ($166 million) through multiple accounts. The Beijing Municipal People’s Procuratorate detailed how the scheme used VIRTUAL currency as a conduit for disguised foreign exchange trading.

China’s central bank has labeled stablecoins a "threat" to global financial stability. At the Financial Street Forum, PBoC Governor Pan Gongsheng reaffirmed tighter crypto oversight, signaling continued regulatory scrutiny.

Beijing Court Sentences Five in $1.18 Billion Crypto-Based Forex Scam

A Beijing court has sentenced five individuals to prison for operating an illegal cross-border foreign exchange scheme involving over $1.18 billion in cryptocurrencies. The Haidian District People’s Court handed down terms ranging from two to four years, with all defendants pleading guilty and waiving their right to appeal.

The Beijing Municipal People’s Procuratorate highlighted the case in an October 28 report as part of its financial sector enforcement efforts. Between January and August 2023, the group used USDT to convert RMB into cryptocurrency, facilitating illegal cross-border transfers through controlled Tether accounts.

Lin Jia, the ringleader, collaborated with four others to receive client funds via personal bank cards linked to an illegal forex operation. The scheme’s scale and sophistication underscore China’s tightening grip on cryptocurrency-related financial crimes.

MEXC Faces Anonymous Allegations of Fraud and Market Manipulation

An anonymous X account under the pseudonym Mystral has leveled explosive allegations against cryptocurrency exchange MEXC, including claims of extortionate listing fees, frozen withdrawals exceeding $10 million, and systematic market manipulation. Unverified screenshots suggest MEXC demanded additional payments from projects like CateCoin after initial $60,000 listing fees, then failed to list tokens when payments were refused.

The most damning accusations involve alleged trading against users—MEXC purportedly opened short positions before orchestrating liquidation spikes on low-cap tokens. Multiple users reported frozen funds, with one claiming $18,500 USDT was withheld while another alleged $30,000 disappeared from internal wallets without 2FA triggers. The exchange reportedly resolved some cases only after public outcry, with partial repayments.