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A Beijing court has sentenced five individuals to two to four years in prison for operating a crypto money laundering scheme that moved over $166 million using USDT between January and August 2023. The ruling marks one of China’s most significant prosecutions of crypto enabled financial crimes, underscoring Beijing’s growing efforts to curb illegal digital asset activities.
Authorities revealed that the crypto money laundering scheme was presented at the 2025 Financial Street Forum Annual Meeting on October 28. The case reflects Beijing’s increasing sophistication in tracking, identifying, and prosecuting cross border digital transactions as officials continue warning against stablecoins’ threat to global financial stability.
Complex USDT Network Facilitated Massive Crypto Money Laundering SchemeBetween January and August 2023, the group orchestrated a crypto money laundering scheme by converting client funds into USDT stablecoins to enable illegal foreign exchange transfers. Over 1.182 billion yuan ($166 million) flowed through multiple accounts, with individual members handling amounts ranging from 149 million to 469 million yuan.
The Beijing Municipal People’s Procuratorate explained that the network used virtual currency as a “bridge” for disguised foreign exchange operations. This crypto money laundering scheme highlighted how digital assets can obscure capital flow trails when coupled with layered banking structures.
The operation, led by Lin Jia alongside associates Lin Yi, Xia, Bao, and Chen, used several Tether trading accounts under their control. They converted incoming yuan into USDT executing cross border transactions and profiting from each exchange a typical structure for a crypto money laundering scheme.
Prosecutors deployed advanced financial data analytics and blockchain tracing tools to map the entire crypto money laundering scheme. Investigators cross referenced timestamps between traditional bank accounts and crypto trading logs exposing inconsistencies in the defendants’ explanations of “legitimate crypto speculation.”
Forensic investigators also coordinated remote data examinations with overseas platforms to ensure procedural compliance, marking a new benchmark for China’s capability to dismantle large scale crypto money laundering schemes.
On March 21, 2025, the Haidian District People’s Court delivered the first instance judgment sentencing all five defendants to prison without appeal. Prosecutors said the case provided key judicial practice references for handling crypto money laundering schemes that cross national boundaries and combine traditional finance with digital asset ecosystems.
At the same Financial Street Forum, Pan Gongsheng, governor of the People’s Bank of China, issued stern warnings on the risks of stablecoins. He emphasized that such assets fail to meet financial supervision standards and often fuel crypto money laundering schemes and terrorist financing.
“Stablecoins, as financial instruments, still fall short of meeting essential regulatory standards,”
Pan stated.
“They have deepened existing vulnerabilities in the global financial system and heightened the risks associated with crypto money laundering schemes.”
Pan reaffirmed the PBoC’s zero tolerance stance toward private digital currencies while continuing to monitor the overseas stablecoin market.
Following mid October directives from the PBoC and the Cyberspace Administration of China, Ant Group and JD.com halted their Hong Kong stablecoin issuance plans. Officials reminded companies that only the state may issue currency warning that private stablecoin ventures could facilitate crypto money laundering schemes.
Ant had previously announced plans to seek stablecoin licenses across multiple jurisdictions but has since pivoted toward blockchain trademark filings like “ANTCOIN.” Meanwhile, its Whale blockchain platform processed over $1 trillion in global payments last year.
Chinese regulators also instructed financial institutions to suspend publications or events promoting stablecoins due to rising fraud and crypto money laundering scheme concerns.
Despite regulatory pushback, Hong Kong’s stablecoin licensing regime has attracted 77 expressions of interest from banks, tech firms, and Web3 startups. The Hong Kong Monetary Authority is conducting early-stage reviews but warned that only a limited number of approvals will be granted to minimize risks of crypto money laundering schemes and financial instability.
