Chinese Criminal Gang Sentenced for Money Laundering with Digital Yuan
A group of criminals in China has been convicted of laundering money using digital yuan as part of an elaborate international scheme. The People’s Procuratorate of Yuecheng District in Shaoxing handled the case, with suspects Yuan, Zhang, and Kou found guilty of using digital yuan accounts to cash out and hide illicit funds.
The scheme involved Yuan responding to a part-time job advertisement on social media in August 2023. The job required him to cash out vendors’ digital yuan wallets with a commission of 0.8%. Yuan would purchase cryptocurrency, send it as a deposit to the advertiser, and then provide the e-CNY receiving QR code to the advertiser to transfer the money to the merchant. The merchants would take a service fee of 1% to 1.5% and return the rest to Yuan in cash.
As the laundering process continued successfully, Yuan recruited his girlfriend Zhang and friend Kou to expand the operation. They moved around different cities in Zhejiang province to avoid detection, laundering over 200,000 yuan of fraudulent money. The gang used unregulated messaging apps from overseas to communicate with the advertiser and maintain their privacy.
Despite knowing the illegal origins of the money, the gang continued their operations until they were caught. Yuan admitted that digital yuan transactions provided strong privacy, making it an attractive option for overseas fraud syndicates to launder money through merchant accounts.
The gang was recently sentenced to prison terms ranging from one year and four months to seven months, along with fines for concealing and disguising the proceeds of their criminal activities. This case highlights the potential risks of using digital currencies for illicit purposes and the importance of regulatory oversight in preventing money laundering.
