Key Takeaways
- A Beijing court sentenced five individuals to prison for illegal USDT transactions.
- The group converted RMB to USDT and moved it abroad, bypassing China’s strict forex controls.
- The ruling underscores Beijing’s continued crackdown on crypto, even as mainland firms expand into Hong Kong.
China’s tightening grip on cryptocurrency use has claimed another high-profile case.
A Beijing court sentenced five individuals to prison for conducting more than $166 million worth of cross-border Tether (USDT) transactions, marking one of the largest crypto-related forex violations prosecuted this year.
The case highlights China’s ongoing zero-tolerance approach to digital assets, even as some of its biggest companies expand their crypto operations through Hong Kong’s more permissive framework.
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USDT Transactions Land 5 in Jail
According to court filings , the group used renminbi (RMB) to purchase USDT through domestic crypto exchanges and over-the-counter (OTC) platforms.
They then transferred the tokens to wallets and exchanges overseas, converting them back to foreign currencies or using them to facilitate international payments.
The court ruled that this “disguised foreign exchange trading” violated China’s Anti-Money Laundering Law and Foreign Exchange Administration Regulations, both of which prohibit unauthorized cross-border fund transfers.
Authorities said the operation handled roughly 1.2 billion RMB ($166 million) across hundreds of transactions, skirting official banking channels regulated by the State Administration of Foreign Exchange.
Harsh Sentences Reflect National Policy
The main orchestrator received a sentence of four years and six months in prison and a fine of 200,000 RMB ($28,000).
Two associates who managed transfers were sentenced to three years and nine months and fined 150,000 RMB ($21,000) each.
Two junior members operating digital wallets received fines of two years and eleven months and 100,000 RMB ($14,000).
All defendants were also ordered to forfeit their illicit gains—roughly 500,000 RMB ($70,000) in total commissions.
The court said the punishments were necessary to deter “activities that undermine national financial stability,” describing the case as a serious threat to China’s capital control system.
Crypto Enforcement Remains Relentless
Despite Hong Kong’s growing embrace of regulated crypto activity, mainland China’s courts continue to enforce a sweeping ban on cryptocurrency transactions.
The sentencing is part of a broader national campaign targeting digital asset use for foreign exchange evasion and money laundering.
Since 2024, Chinese prosecutors have pursued over 50 similar cases, collectively seizing assets worth billions of RMB.
The Supreme People’s Procuratorate has repeatedly warned that “virtual currency offshore exchange activities” fall under illegal financial operations, carrying both civil and criminal penalties.