China’s financial authorities have spotlighted a landmark case involving the use of cryptocurrency for illegal foreign exchange operations, underscoring the country’s growing vigilance against emerging financial crimes.
At the 2025 Financial Street Forum Annual Meeting in Beijing, the Beijing Municipal People’s Procuratorate released its Exemplary Cases of High-Quality and Effective Performance of Financial Procuratorial Duties (2024–2025).
Among the 13 featured cases spanning banking, insurance, credit, and securities sectors, one particularly notable example involved the use of Tether (USDT) to facilitate disguised cross-border foreign exchange trades totaling more than RMB 1.18 billion ($166 million).
According to the Procuratorate, from January to August 2023, five individuals, identified as Lin, Xia, Bao, Chen, and others, colluded to convert client-transferred renminbi into USDT via multiple trading accounts they controlled.
The gang then transferred the digital assets overseas through crypto exchanges, effectively bypassing China’s strict foreign exchange regulations.
On March 21, 2025, the People’s Court of Haidian District, Beijing, sentenced the five defendants to prison terms ranging from two to four years and imposed corresponding fines. The defendants, all of whom pleaded guilty, did not appeal, and the verdict is now final.
Prosecutors emphasized that the case exemplifies the “precise crackdown” on new types of financial crimes that exploit digital assets to move funds across borders.
Faced with challenges such as the anonymity of crypto transactions and the difficulty of cross-border evidence collection, the Procuratorate coordinated with public security authorities to build a comprehensive financial data and blockchain analysis system.
By mapping correlations between traditional bank transfers and crypto transactions, investigators identified suspicious fund flows and debunked defendants’ claims of “cryptocurrency speculation.”
The case is now being hailed as a model for China’s financial law enforcement, providing a critical judicial reference for detecting and prosecuting future crimes involving virtual currencies and illegal foreign exchange operations.