Chinese Citizen Convicted of Tether Purchase in Virtual Money Laundering Activities

Ilsutasi Tether (USDT). (photo: twitter @tethergold)

JAKARTA - A resident in China identified only as "Mr. Chen" has been convicted by the People's Procuratorate of Fuzhou Mawei on charges of "concealment offenses and concealment crimes" for purchasing Tether worth 94,988 Chinese yuan (IDR 197.4 million) for someone he knows.

According to local news reports, Mr. Chen was contacted by Mr. Lin, an acquaintance of his, around February 2022 to post his bank card details on the social media app WeChat. Mr. Chen later received seven fiat yuan transfers from Mr. Lin, which is used by Mr. Chen to buy USDT.

The stablecoin is then sent back to Mr. Lin. Through this process, Mr. Chen earned a total commission of 147.1 yuan (IDR 306 thousand).

"Fraudsters use virtual currency to transfer and launder the proceeds of crime. This type of online money laundering by using the name of buying virtual currency, knowing that other people use information networks to commit crimes, and providing assistance to them, has violated the law," said the Prosecutor's Office Fuzhou Mawei people.

The People's Procuratorate of Fuzhou Mawei then sentenced Mr. Chen, suspended for one year, as well as a fine of 5,000 yuan (IDR 10.4 million).

Since the beginning of the year, the Chinese authorities have been carrying out a strict crackdown on crypto activity in the country. Last week, Jinfeng Sun, political commissar of the Network Security Bureau, said that technologies such as blockchain and artificial intelligence were involved in a series of incidents related to "fraud and data theft."

However, this enforcement appears to be broad and not limited to crime prevention efforts. In July, the $1.5 billion Multichain protocol was shut down by Chinese police after its CEO was arrested. Since then, user-linked assets, as well as company funds, have mysteriously been converted into privacy coins and stablecoins, and linked out of the protocol. Never given an explanation why this happened.