Three in China Jailed for Illegal 30M Yuan Crypto Forex Transactions

Three young men in China have been sentenced to prison and fined for using crypto to conduct illegal foreign exchange transactions. The Jianhu County Procuratorate filed public charges against the trio, who completed over 650 transactions, exchanging nearly 30 million yuan in foreign currency within a few months.

Crypto Forex Exchange Crime in China

In early 2020, 25-year-old Lin, struggling to find employment due to his low educational qualifications, discovered cryptocurrency and its lucrative potential. Through a friend’s introduction, he partnered with his high school classmate Yan to begin crypto bricklaying in a local studio.

Lin, later got in touch with a Nigerian national, purchased Tether (USDT) using Nigeria’s local currency, the naira, through Binance. He transferred the Tether to his own Binance account and sold it to domestic coin dealers in exchange for RMB, which was then deposited into a bank account provided by an associate named “Prince.” Lin earned profits by marking up Tether prices by 5% before selling them at market rates.

From September 2020 to January 2021, Lin and Yan conducted disguised foreign exchange transactions worth over 21.29 million yuan. After Xie joined their operation in January 2021, the trio executed additional transactions totaling 8.38 million yuan by April 2021.

Three Men Found Violating Foreign Exchange Rules

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Prosecutors argued that these disguised foreign exchange transactions evaded China’s strict foreign exchange regulations, violating the stability of the domestic financial market. They warned that such activities distort national economic data, disrupt financial decisions related to exchange rates and foreign reserves, and pose significant risks to the market.

The investigation revealed that Lin and his associates used cryptocurrency to facilitate cross-border payments and foreign exchange services, evading regulatory oversight. This was deemed a breach of foreign exchange management laws and a disruption to the legal exchange rate system.

Prosecution Ruling

On April 29, the court, after trial, accepted the charges and sentenced Lin and Yan to five years in prison each and imposed fines. Xie was also imprisoned for one and a half years, and was fined. None of the three individuals appealed, and the judgment has taken effect.

Also Read: Hong Kong Busts Crypto Fraud Group Involving Students, Defrauding Victims of HK$360M

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