The Haidian District People’s Court of Beijing has sentenced five individuals to prison terms ranging from two to four years for operating an illegal cross-border foreign exchange scheme that utilized cryptocurrencies to move over $1.18 billion (approximately 1.182 billion yuan). All defendants pleaded guilty and accepted their sentences without appeal, marking a significant prosecution in China's crackdown on crypto-enabled financial crimes.
The operation, which took place between January and August 2023, was led by Lin Jia under instructions from unnamed parties, with collaborators including Lin Chen, Bao, Yi, and Xia. They used multiple bank accounts registered in their names to receive large sums of RMB from clients, then converted the funds into USDT stablecoins through various Tether accounts under their control. This method served as a bridge for disguised foreign exchange trading, enabling cross-border transfers while profiting from the exchanges.
The Beijing Municipal People’s Procuratorate highlighted the case in a report released on October 28, 2025, showcasing advanced forensic techniques to overcome challenges in crypto investigations. Authorities combined financial data analysis with blockchain transaction tracing, comparing temporal correlations between bank and crypto trading accounts to identify abnormal fund flows. The procuratorate established a comprehensive evidence system, including remote examination of overseas data and a full coverage evidence collection strategy, to ensure legality and authenticity.
In court, the defendants' claims of crypto speculation were ruled out as an unreasonable excuse, with the focus instead on their subjective knowledge of illegal activities. The case, which provided key judicial references for future crypto-related crimes, coincided with warnings from People’s Bank of China Governor Pan Gongsheng at the 2025 Financial Street Forum. He labeled stablecoins a threat to global financial stability, citing failures in customer identification and anti-money laundering compliance, and reaffirmed China's zero-tolerance policy toward private digital currencies.
Amid this backdrop, stablecoin markets have grown to around $310 billion in capitalization, with Tether and USD Coin dominating supply. Additionally, Chinese regulators intervened to halt stablecoin issuance plans by companies like Ant Group and JD.com in Hong Kong, emphasizing that currency issuance must remain a state monopoly.
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