Chinese Police Uncover $1M USDT Money Laundering Scheme

According to BlockBeats, the police in Qingdao, China, are gearing up to take a deep dive into a rather tangled case of cybercrime involving the crypto stablecoin USDT. They’ve got nine suspects in their net and a staggering 8 million yuan swirling around in this mess.

The Qingdao Case: A Timeline of Events

The report shows that it all started back in February when the eagle-eyed officers at the Madian Police Station of the Jiaozhou Public Security Bureau got wind that a fugitive suspect, Xue, who was knee-deep in telecom fraud, had popped back up in Jiaozhou.

By February 24, they’d nabbed Xue and unearthed some rather fishy messages on his phone, hinting at a dubious partnership with another individual.

It turned out that Xue had been using his connections to set up companies and open public accounts, which he then passed off to this partner in crime. These accounts often carried names with the innocent-sounding term ‘study abroad,’ and Xue was promised a pretty penny for his trouble.

The USDT Trail

Sensing that Xue’s hands were dirtier than they’d initially thought, the police rallied a special task force to peel back the layers of this operation. They dug into the transfer records peppered with ‘study abroad’ and found that business licenses had been used to open these public accounts, which were then employed to buy USDT—a digital currency that’s become the darling of money launderers everywhere.

The USDT trail led them to Xue’s partner, Kuang, who was promptly arrested on February 26. Once in custody, Kuang spilled the beans, confessing to a cozy collaboration with two others, Sun and Sui, in aiding criminals.

The Modus Operandi: How the Criminals Operated

Kuang admitted that he hardly ever saw Sun and Sui face-to-face; their communication was mostly confined to the digital realm. The previous September, Sun had dangled a quick-and-dirty money-making scheme in front of Kuang involving the opening of public accounts for the purpose of laundering illicit funds.

Although Kuang initially balked at the idea, the lure of easy money proved too tempting, and he caved. He then roped Xue and Sui into the plot. With a growing need for more public accounts, Kuang enlisted the help of friends to procure business licenses and public accounts using other people’s identification documents.

By November 2023, Kuang and Sun had put these accounts to work, receiving dirty money and funneling it into the accounts. Sun was the mastermind behind coordinating the flow of funds, while Kuang handled the transfers to Sui, who then used the money to buy USDT. After taking their cuts, the trio funneled the laundered funds back to their higher-ups in the form of USDT.

The Arrests: Bringing the Perpetrators to Justice

The task force wasted no time in tracking down Sun and Sui, who quickly confessed once they were in custody. Their four-month-long investigation culminated in the arrest of six more individuals tangled up in the illegal trade of national documents.

Sun shed some light on the complexities of their operation, detailing how the money laundering process involved buying USDT and returning it to their bosses. The commission rates were set at 6% for Sun, 5% for Kuang, and a slice of the pie for Sui. By the time they were caught, the trio had laundered over 8 million yuan in USDT through their illegal activities.

Now, nine individuals are staring down the barrel of criminal charges and are on the brink of prosecution. The police have issued a stern warning to the public: Don’t lend your identification documents, bank cards, or public accounts to others, or you might just find yourself caught up in something far more sinister than you’d ever imagined.

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