Chinese authorities have reportedly dismantled an illegal underground banking operation that used overseas "virtual currency trading platforms" to move approximately $22 billion between China and other countries.
On December 24, an account operated by China’s State Administration of Foreign Exchange (SAFE) on the social media app WeChat reported that an underground bank was using cryptocurrencies to circumvent foreign exchange restrictions.
In China, citizens are prohibited from exchanging more than $50,000 in foreign currency per year, but cryptocurrencies have long been known to be used to circumvent these restrictions.
Xu Xi, an inspector from the SAFE Qingdao branch, explained that underground banks buy virtual currencies and then sell them through overseas trading platforms to obtain the necessary foreign currency.
During the on-site investigation, authorities seized $28,000 (200,000 yuan) worth of cryptocurrencies, including Tether (USDT) and Litecoin (LTC).
According to reports, the underground bank's business involves a thousand bank accounts in 17 provinces and cities in China.
In China, both mining and general use of cryptocurrencies are banned, and some observers believe the real reason behind the ban is the country’s capital controls that have been in place since 2016.
Leave a comment
Your email address will not be published. Required fields are marked *
