- Shanghai crackdown on illegal Tether transactions by Yang, Xu.
- Case involves 6.5 billion yuan, primarily USDT.
- No change in China’s cryptocurrency exchange ban.
The crackdown affects illegal cross-border transactions using stablecoins, reinforcing China’s strict cryptocurrency regulations.
Officials in Shanghai dismantled a network involving 6.5 billion yuan illegal transactions with stablecoins. Yang and Xu managed public accounts for shell companies, utilizing Tether for unregulated foreign exchange activities over three years.
Yang and Xu were involved in illegally facilitating cross-border transactions under the guise of shell companies. They used Tether to circumvent regulations, highlighting gaps in existing oversight.
Gao Yongfeng, Senior Partner, Shanghai Jinli Law Firm, stated, “This illegal exchange mechanism splits what should be a single, regulated forex transaction into two separate operations, thereby evading regulatory oversight.”
The immediate result has underscored China’s regulatory stance. The financial impact is isolated to the facilitators of these transactions, separating them from legitimate companies.
Financially, the crackdown highlights China’s aggressive regulatory measures, impacting illegal forex activities. No legitimate blockchain companies were targeted, reflecting a focused enforcement strategy.
The case may signal further regulatory tightening in China. Potential outcomes could involve heightened scrutiny on crypto-fiat operations, aligning with China’s complete ban on cryptocurrency exchanges to stabilize markets and prevent capital flight.
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