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Six arrested in cryptocurrency money-laundering scheme in northeast China amid focus on crypto-related capital flows

  • Police in China’s northeastern Jilin province made the arrests in connection with a scheme that sent US$296 million to South Korea
  • Beijing has increased its efforts in combating illicit crypto outflows, including an update to its Anti-Money-Laundering Law now under review

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China has recently stepped up efforts to combat cryptocurrency-related money laundering. Photo: Shutterstock
Kelly Le

Police in China’s northeastern Jilin province have arrested six people in connection with a money-laundering case involving the movement of 2.14 billion yuan (US$296 million) in cryptocurrency to South Korea.

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Jin and Shen, the surnames of two suspects, allegedly carried out an illegal currency exchange business, according to a statement issued by police in the city of Panshi, the state-run China News Service reported on Friday.

Some people were defrauded out of their money, according to police, who did not identify which cryptocurrencies were used in the scheme.

Law enforcement became aware of the scheme when bank accounts under the suspects’ names showed “large [daily] transactions” involving a “large number of customers”. The activity had the characteristics of an illegal underground bank, according to police.

Police said the criminal group used mainland China bank accounts to receive funds, which were then used to buy cryptocurrency at over-the-counter exchanges. The crypto could then be used to facilitate foreign money exchange for cross-border business, such as e-commerce firms and other import and export businesses.
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