The Chinese Government Cracks Down on Underground Bank Using Crypto for Illegal Exchange
The Chinese State Administration of Foreign Exchange (SAFE) has taken action against an underground bank that used cryptocurrency to offer illegal yuan exchange services. SAFE reported that the operation, led by a Chinese national named Jin, had over 1,000 bank accounts and operated in 17 provinces. The bank moved 15.8 billion yuan ($2.2 billion) overseas to purchase crypto on exchanges and provide yuan exchanging services. The Qingdao police were able to identify the accounts and discovered that a textile worker named Li acted as a broker for the exchange transactions. The report emphasized that managing and exchanging cryptocurrency is illegal in China.
How the Illegal Exchange Operation Worked
Xu Xiao, an inspector at the State Administration of Foreign Exchange, explained that the underground bank would purchase virtual currencies and then sell them through overseas trading platforms to obtain the necessary foreign currency. This process constituted the illegal act of buying and selling foreign exchange. Additionally, SAFE authorities warned against participating in illegal trades, even if they offer better exchange rates and convenience compared to legal channels.
Cracking Down on Illegal Exchange Businesses
Huang Hui, Deputy Director of SAFE’s Management and Inspection Department, stated that the agency would continue collaborating with other state institutions to crackdown on illegal exchange businesses like underground banks. They aim to ensure that legal channels are used for these operations, promoting compliance with exchange regulations.
Hot Take: Combating Illegal Crypto Exchanges
The Chinese government’s crackdown on the underground bank using cryptocurrency for illegal exchange services demonstrates its commitment to combating unlawful activities in the crypto sphere. This case highlights the potential risks associated with unregulated crypto exchanges and their use in illegal transactions. By taking action against such operations, authorities are sending a clear message that illegal activities will not be tolerated, and individuals must comply with established regulations. As the crypto industry continues to evolve, it is crucial for governments worldwide to implement and enforce appropriate measures to ensure the integrity and security of financial systems.
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