Authorities in China are still actively regulating financial services of money laundering. A publication on Tuesday by 8BTC has informed that the Chinese police are currently investigating a local over-the-counter or OTC trader who allegedly facilitated the laundering of funds garnered through illicit activities. These funds were laundered through the US dollar-backed stablecoin, USDT.
Chinese OTC trader facilitated over $70K laundering in USDT
As per publication today, the OTC dealer helped undisclosed fraudster cash out more than 500,000 Chinese Yuan, which is about $73,500. The police explained that the ill-gotten funds were first transferred to the OKEx exchange, before being converted by the OTC trader to the USDT stablecoin. This single act resulted in the cross-provincial investigation of the trader.
The undisclosed fraudster reportedly targets victims online by first reaching out to them as a friend. Afterward, the scammer will convince them to invest in stock or gambling activities. Meanwhile, investigations into the matter are still ongoing, and the authorities, OKEx exchange, including the trader, are “continuing to cooperate in the investigation.”
Concealing Proceeds of Crime is a Serious Offense
OTC dealers who choose to continue a business deal with a fraudulent buyer or associate with money gotten from criminal activity is thought to have concealed proceeds from crimes. Also, attempting to conceal ill-gotten funds is regarded as a severe offense for any trader that deals with OTC. Many defaulters in China are being punished for this.
The Chinese authorities would list names of the defaulters in a “punishment list,” banning them from using certain bank services for the next three years. Additionally, they will be prohibited from conducting online transactions and non-OTC trading as well. However, “if the OTC merchant really confirms that it was unintentionally received the black money, there may be some room for explanation.”
The development today is yet another effort of the Chinese authorities to crack down money laundering with digital currencies. Besides, this will help to reduce the amount of money being moved out of the country on a yearly basis. Recently, Blocdesk reported that $145 billion in digital currencies leaves the country annually from the gamblers and casino players to related platforms overseas.