The People's Court of Pudong New Area, Shanghai announced on July 16th a case of illegal exchange of virtual currency that was sentenced in March this year. The case shows that Yang, Xu, and others operated domestic shell company accounts to provide stablecoins (with Tether as the trading medium) to unspecified clients' overseas accounts, thereby achieving cross-border fund transfers and earning profits. Over the past three years, they have participated in illegal foreign exchange trading with a total amount of 6.5 billion yuan. Among them, Yang is responsible for recruiting clients and allocating foreign exchange funds overseas, while Xu manages the corporate accounts of 17 shell companies in China, with daily processing of over 10 million yuan in capital flow. The division of labor is clear and the cooperation is close.
According to the disclosed case, at the end of 2023, Ms. Chen, a resident of Shanghai, was restricted by China's annual foreign exchange quota of 50000 US dollars per person due to the need to remit money to her daughter overseas. She then contacted an overseas "exchange company" (the domestic shell company A controlled by Yang and others) and followed the instructions to transfer RMB into the account of Company A. Subsequently, her daughter's overseas account received an equivalent amount of foreign exchange, and the "exchange company" charged a certain percentage of transaction fees as compensation. For a long time, this criminal gang has been providing illegal exchange services to customers who have foreign currency and RMB exchange needs both domestically and internationally through cross-border "collusion" under the name of "collection and payment" overseas.
