Chinese authorities have discovered an underground banking operation worth $1.9 billion that involved the well-known stablecoin Tether. The authorities eliminated two subterranean operations in Fujian and Hunan, and the police froze 149 million yuan which is $20 million related to the USDT financial operations.
The Tether stablecoin is used to swap foreign currency at the Chengdu, China, underground banking operations. The city police stated they had caught 193 people in 26 provinces and highlighted the specifics of the covert operations in a media release. According to the police investigation, the main purpose of the covert USDT financial operations, which started in January 2021, was to transport investment assets, cosmetics, and medications outside.
Authorities in Fujian and Hunan shut down two secret investigations and froze 149 million yuan, or roughly $20 million, linked to USDT banking transactions. China has outlawed any activity about cryptocurrencies, but traders can still get around the laws and make unique uses of cryptocurrency assets. China is home to some of the world’s biggest stablecoin holders, with 33.3% of Chinese investors holding different stablecoins, second only to Vietnam’s 58.6%, according to a report by Kyros Ventures.
Chinese Traders’ Persistence During Cryptocurrency Bans
The use of cryptocurrencies, cryptocurrency exchanges, and Bitcoin mining operations are all prohibited by Chinese law. Even with these strict regulations in place, the local populace has consistently managed to get around the ban. China contributed the most to the difficulty rate of the Bitcoin network at the time of the mining ban. China’s mining hash rate contribution unexpectedly shot to second place a year after the ban, demonstrating their tenacity in the face of limitations. Similarly, Chinese traders switched to decentralized exchanges when the government outlawed centralized ones.
Following the prohibition, there was a notable increase in the adoption of decentralized finance (DeFi) protocols by Chinese dealers. Furthermore, some merchants continued their operations despite the prohibition by using virtual private networks, or VPNs. This flexibility demonstrates the Chinese dealers’ unwavering inventiveness in continuing to interact with cryptocurrencies despite official efforts to limit them.