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Points of Focus
- Shanghai police arrested 19 suspects in a crypto exchange network involving nearly 20 billion yuan.
- The group allegedly moved funds through a yuan-to-crypto-to-foreign-currency chain.
- A second Shanghai case and a 1.182-billion-yuan Beijing USDT case used crypto as a cross-border FX bridge.
Shanghai police have arrested 19 suspects accused of running a crypto-linked foreign-exchange network that handled nearly 20 billion Chinese yuan. Disclosed on Aug. 27, the case involved a route that allegedly converted domestic yuan into crypto before selling it for foreign currency paid into overseas accounts.
Crypto-linked yuan deposits to overseas currency payouts
According to The Paper, Shanghai economic crime investigators opened the case in January after finding online promotions for foreign-exchange services. Police said the group had operated since August 2024 without regulatory approval, charging clients to convert yuan into foreign currency.
Customers allegedly transferred yuan into accounts controlled by the group. Operators then bought crypto, moved it through overseas channels, and sold it for foreign currency sent to client-designated accounts. Police described the route as “yuan-virtual currency-foreign currency.”
Police said members handled client recruitment, crypto dealers, bank accounts, and fund transfers. Five suspects have been approved for arrest on suspicion of illegal business operations and aiding information-network crimes, while the other 14 remain under criminal compulsory measures.
Shanghai crypto cases show recurring cross-border FX route
Shanghai police disclosed a second case on Aug. 27 involving nine suspects and more than 200 million yuan. The group allegedly ran cross-border exchange and virtual-credit-card platforms, collected crypto overseas, and used fabricated settlement records to move funds between crypto, foreign currency, and yuan.
A Beijing case disclosed in 2025 followed a similar route. Five people received yuan, converted it into Tether’s USDt (USDT), and transferred the USDT across borders as part of an illegal foreign-exchange operation worth more than 1.182 billion yuan. A Beijing court sentenced them to between two and four years in prison on March 21, 2025.
China maintains a prohibitive stance on virtual-currency-related financial activity. At a November 2025 meeting, the People’s Bank of China said such activity is illegal and cited stablecoins as carrying money-laundering and illicit cross-border transfer risks.
Shanghai police said they have arrested more than 70 suspects in crypto-linked illegal business and money-laundering cases since the start of 2026.
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