In an international conspiracy, a criminal gang in China has been sentenced for money laundering using digital Yuan.
The case in which suspects Yuan, Zhang, and Kou were found guilty of using digital yuan accounts to cash out and conceal criminal proceeds was handled by the People’s Procuratorate of Yuecheng District, Shaoxing, according to a report by Mpaypass.
Money Laundering Using Digital Yuan and Crypto
Yuan decided to apply for a part-time job after seeing an advertisement on social media in August 2023. The advertiser requested that Yuan withdraw funds from vendors’ digital Yuan accounts upon payment of a 0.8% commission.
Yuan initiated the process by purchasing cryptocurrency and transferring it to the advertiser as a deposit. After locating a merchant with digital Yuan wallets, Yuan would provide the advertiser with the QR code for the e-CNY receiving, and the latter would transmit the funds to the merchant.
The merchants would typically charge a “service fee” of 1% to 1.5% upon receiving the money and return the remaining amount in Yuan banknotes. Money laundering would continue as long as Yuan could locate vendors with digital Yuan purses available.
The process became quite familiar to Yuan after a few operations. Yuan expressed his surprise at the rapidity of the money’s arrival, stating, “I did not anticipate it to be this fast; the process of doing it independently is too slow.”
Yuan Recruits More to Expand Operation
Despite being aware of the advertiser’s questionable origins, Yuan was unable to resist the allure and enlisted the assistance of his fiancée, Zhang, and friend, Kou. He offered them 50 yuan for each 10,000 yuan, and they helped cash out to generate a profit.
The gang typically contacted the advertiser using unregulated messaging apps from overseas to avoid police action, as not many shops with e-CNY accounts agreed to such operations, and repeated actions could be readily noticed.
They began to circulate through the cities of Zhejiang province in early September, traveling to new crime locations after successful cash-outs and laundering the fraudulent money of over 200,000 yuan.
Yuan admitted that “digital yuan transactions have robust privacy features, and overseas fraud syndicates also exploit this feature to acquire some merchants’ accounts for money laundering.”
The court recently imposed a fine on the gang and sentenced them to fixed-term imprisonments that ranged from one year and four months to seven months for concealing and disguising the proceeds of crime.