Shanghai prosecutors have busted a cross-border cryptocurrency money laundering case involving over 200 million yuan.

According to Mars Finance, on July 1st, the Jing'an District People's Procuratorate of Shanghai, China, recently filed a public prosecution against Li, a member of a criminal gang involved in illegal cross-border foreign exchange transactions using virtual currency, on charges of illegal business operations. The case was heard and sentenced on June 10th, bringing to a close a series of illegal business operations spanning three years and involving over 200 million yuan. In July 2024, the State Administration of Foreign Exchange discovered abnormal clues during routine monitoring that Company Z was using virtual currency to transfer assets across borders for domestic clients, and subsequently transferred the case to the public security authorities. Investigation revealed that Company Z was registered overseas in 2019, outwardly presenting itself as a "private bank" and developing a virtual banking app to create a facade of legitimacy, but it did not obtain a foreign exchange business license from my country and was actually engaged in illegal foreign exchange exchange activities. The gang targeted high-net-worth individuals with funding needs for overseas property purchases, immigration, and study abroad, using intermediaries to attract them, with account managers, traders, and customer service personnel handling the currency exchange process. Clients purchased virtual currency from virtual currency exchange providers using RMB and transferred it to Z Company's overseas virtual wallet. The group then exchanged the virtual currency for foreign currency overseas and transferred it to the clients' designated overseas accounts. There was no actual cross-border flow of funds; instead, settlements were made separately through domestic and overseas fund pools. Z Company charged a 3% exchange service fee and paid a 0.5% commission to the intermediaries. Nine people were apprehended in this case, and one principal offender is still under investigation. Upon investigation, the individuals involved were found to have violated national laws by illegally trading foreign exchange and disrupting financial order. The circumstances were serious or particularly serious, and they should be prosecuted for illegal business operations. The court sentenced Gao, Li, and three others to prison terms ranging from two years and six months to six years, and fined them between RMB 1.5 million and RMB 300,000. The prosecution decided not to prosecute Chen, Huang, and three others due to the relatively minor nature of their crimes, the relatively small amount of money involved, and their voluntary confession and acceptance of punishment.