Caught red-handed in the wallet. Based on a recent report from Chainalysisthe crime in the crypto a sector decreased by 65 in 2023 compared to 2022. Is this a bear market effect, or are fraudsters becoming aware of the blockchain’s traceability capabilities? Probably a combination of both. Those who didn’t seem to be aware, however, are those USDT launderers arrested by Chinese police.
Buying cheap USDT to launder criminal money
21 is Bitcoin’s emblematic number. There will only be 21 million of them, not one more. But 21 is also the number of thugs arrested by the Chinese police this July. Up to now, this well-oiled racket had embezzled almost 380 million yuanequivalent to 55 million dollars. To achieve this, the bandits used Tether’s USDTa stablecoin whose value is indexed to that of the US dollar.
It all began when authorities in the province of Qinshui in April noticed suspicious movements from one bank account: that of a certain Mouyue zhao. In their view, abnormal capital transactions were circulating from the account. Flows that had all the hallmarks of money laundering. After months of investigationthe investigators uncovered a system of over-the-counter USDT resale (OTC or over the counter en English), outside traditional trading channels.
The group of criminals boughtUSDT at reduced prices to organizations wishing to launder their ill-gotten gains. They then resold it using the famous Chinese courier service WeChatvia newsgroups. The traffic had been going on since October 2021.
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Members of USDT laundering ring arrested
Chinese police have traqué these criminals across six cities in four different provinces: Guangxi, Jiangxi, Henan and Anhui. They pulled out all the stops: 50 officers divided into 3 teams. All 21 suspects were arrested, and 40 cell phones were confiscated. The police also recovered 200,000 yuan ($28,000) in cash and 1 million yuan ($140,000) in USDT.
These bandits now face a sentence which can go up to 10 years in prison.
The cryptos and stablecoins are still used to some extent today for the money laundering. This is a fact. However, contrary to what the media and regulators would have us believe, this does not constitute the majority of crimes. The majority of fraudulent crypto transactions are scams that take advantage of user errors when manipulating wallets.
And these amounts remain derisory in the face of illegal transactions recorded in dollar. The currency case remains the preferred tool of criminals. Criminals are slow to understand that, via blockchain, all transactions are recorded, which is far from practical when you want to avoid getting caught, admittedly. Nevertheless, this reality seems to be slowly making inroads. Even Hamas announced it was abandoning Bitcoin donationsfor fear of being traced.
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