Chinese Bankers Facing Crypto Money Laundering Charges

A case involving some former Chinese bankers from the Bank of Huludao allegedly set up a scheme to launder crypto money.

An intricate crypto fraud scheme that fraudulently obtained funds from a local bank has been exposed by Chinese authorities. According to The National Business Daily, a Chinese financial news source, former executives from Bank of Huludao, a bank located in Northeast China, were among the individuals implicated.

The report reveals that the bank was robbed of a substantial sum of 1.8 billion yuan, equivalent to approximately $248 million. Court documents indicate that a 44-year-old suspect named Chen assisted in laundering a minimum of 250 million yuan ($34.4 million) for the former executives through his personal bank accounts.

The fraud raises concerns about the perceived anonymity of cryptocurrencies, which is perceived to facilitate unlawful activities by money launderers, as well as the ease of cross-border transactions. These hazards are being addressed by regulatory bodies worldwide while simultaneously promoting innovation in digital assets.

Bank executives embezzled 2.6 billion yuan

The National Business Daily report provides a detailed account of the alleged crypto fraud scheme that the suspects were involved in. Li Yulin, former party secretary of the Bank of Huludao, and Li Xiaodong, former acting president, were accused of embezzling 2.6 billion yuan by manipulating non-performing assets along with two others in August 2020.

The report alleges they attempted to conceal their actions following the purported embezzlement. They allegedly converted over 1.8 billion yuan into foreign currency in September 2020 and transferred the funds to company bank accounts in Hong Kong that they controlled.

The suspects purportedly acquired cryptocurrencies through WeChat groups, including one known as “Longmen Inn,” between September and October 2020. The cryptocurrencies were purportedly sold abroad, and the proceeds were converted into US dollars. These dollars were deposited into bank accounts under the control of Hong Kong companies.

Ongoing Bank Case Sentenced by Chen

Chen, the alleged mastermind of the money laundering scheme, was sentenced to 2 years and three months in prison and fined 2 million yuan. However, the report suggests that legal proceedings regarding the alleged misconduct of the former bank executives are still ongoing.

A comparable situation transpired when Yang Qichao, a Chinese student, was accused of a crypto fraud scheme and subjected to a four-year prison sentence. Authorities must remain vigilant in preventing using digital assets for illicit purposes as regulatory frameworks for cryptocurrencies continue to evolve.