China Cracks Down on Crypto-Based Forex Scheme, Five Sentenced for Illegal Trading
Quick Breakdown
- Five people convicted for using cryptocurrency in illegal foreign exchange trades worth ¥1.18 billion.
- Beijing prosecutors highlight case as model for tackling new crypto-related financial crimes.
- Investigation exposed cross-border USDT transactions used to disguise forex trading.
Beijing authorities have sentenced five individuals for using cryptocurrency to illegally trade foreign exchange, marking a major step in China’s ongoing effort to curb financial crimes tied to digital assets . The convictions were detailed in the Financial Procuratorial High-Quality Case Report (2024–2025) released during the 2025 Financial Street Forum in Beijing.
A Beijing court in China sentenced five individuals to prison terms ranging from two to four years for converting client-transferred RMB into USDT and transferring it across borders, effectively engaging in disguised foreign exchange transactions involving over $166 million.…
— Wu Blockchain (@WuBlockchain) October 29, 2025
Using USDT as a bridge for cross-border transactions
Between January and August 2023, the defendants—identified as Lin and four associates—operated a sophisticated network that used Tether (USDT) to facilitate illegal currency exchanges exceeding ¥1.18 billion ($160 million). Acting under the direction of an overseas “black market” exchange ring, they received large sums of yuan in domestic bank accounts, converted the funds into USDT through various trading platforms, and then moved the assets across borders to complete disguised forex transactions.
In March 2025, the Haidian District People’s Court found all five guilty of operating an illegal business. They received prison terms ranging from two to four years and were fined accordingly. The group admitted guilt and did not appeal, finalizing the verdict.
Strengthened evidence framework for crypto crimes
Prosecutors faced major challenges due to the encrypted and decentralized nature of cryptocurrency trading. To counter this, Beijing’s procuratorial team employed a “data-driven and tech-enabled” investigation strategy. They collaborated with technical experts to trace blockchain transactions, matched crypto movements with domestic banking records, and reconstructed full transaction chains linking yuan inflows to cross-border USDT conversions.
The case underscores China’s growing capacity to trace and prosecute crimes involving virtual currencies and illegal forex operations. Authorities say the methods developed in this investigation will serve as a model for tackling emerging financial crimes in the digital economy.
The crackdown in Beijing coincides with a broader international push to combat crypto-related financial misconduct. Global law enforcement agencies, working with blockchain intelligence firms, recently seized more than $300 million in cryptocurrency tied to cybercrime and fraud through two coordinated multinational operations.
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