A local Chinese bank, Bank of Huludao, recently discovered a system of “complex embezzlement” and money laundering via crypto orchestrated by two of its former executives.
The scandal, which reverberated across the financial community, involved the illicit transfer of a whopping 1.8 billion yuan (about $248 million). This discovery highlights the vulnerabilities of financial institutions and the methods used by individuals to exploit these systems for personal gain.
Cryptocurrency and cross-border laundering
As reported by Chinese newspaper The National Business Daily, the scheme was not limited to embezzlement, but also extended to “sophisticated laundering tactics” involving cryptocurrency.
Detailed investigations and court documents revealed that former executives Li Yulin and Li Xiaodong used their positions at the bank to misappropriate funds originally intended to resolve non-performing assets.
In the months following the embezzlement, they and their accomplices converted those funds into foreign currencies and transferred them to accounts at companies they controlled in Hong Kong. THE following steps involved a secret operation where funds were invested in cryptocurrencies.
Through platforms like WeChat and various cryptocurrency trading groups, including one called “Longmen Inn,” the defendants purchased significant quantities of cryptocurrencies.
These digital assets were sold overseas and the proceeds were laundered through US dollar transactions into bank accounts based in Hong Kong.
Such maneuvers appear to have camouflaged their illicit activities and capitalized on the regulatory ambiguities associated with cryptocurrencies.
Legal repercussions and wider implications
According to the report, the court has already taken decisive action against one of the accomplices, a 44-year-old named Chen, by sentencing him to more than two years in prison and imposing a large fine on him for his role in the money laundering. part of the embezzled funds. .
This case notably occurred when China intensified its repression against cryptocurrency-related crimes. Despite the country’s strict measures anti-crypto regulationsthe appeal of digital currencies to mask illegal transactions remains high.
Recent months have been marked by several high-profile crackdowns. Last month, law enforcement agencies across the country disrupted a secret banking network who used digital currencies for unauthorized currency exchanges totaling approximately 2.14 billion yuan ($295.8 million).
This network primarily facilitated the conversion of Chinese yuan into South Korean won, bypassing established foreign exchange regulations.
Moreover, the same month. Chinese police dismantled a vast clandestine banking operation accused of using Tether’s USDT stablecoin for illegal transactions. This vast network, active in several provinces, is said to have processed transactions worth more than $2 billion.
As Bitcoinist reported, citing local media, the Chengdu Municipal Public Security Bureau revealed that this clandestine system operated in 26 provinces and regions, leading to the arrest of 193 people and the opening of 58 prosecutions. criminal investigations by various public security services.
Authorities seized 149 million yuan related to these illicit activities as part of their crackdown.
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