Chinese court documents show that a 44-year-old suspect named Chen helped launder at least 250 million yuan ($34.4 million) through his personal bank accounts for the former executives.
Chinese authorities have busted an intricate crypto fraud scheme that stole funds from a local bank. The National Business Daily, a Chinese financial news source, reported that former executives from Bank of Huludao, a bank in Northeast China, were involved, along with others.
The report reveals that a massive 1.8 billion yuan, about $248 million, was taken from the bank. Court documents show that a 44-year-old suspect named Chen helped launder at least 250 million yuan ($34.4 million) through his personal bank accounts for the former executives.
The fraud raises concerns about cryptocurrencies’ easy cross-border transactions and perceived anonymity facilitating illegal activities by money launderers. Regulatory bodies worldwide are trying to address these risks while still encouraging innovation in digital assets.
2.6 Billion Yuan Embezzled by Bank Executives
The National Business Daily report explains how the suspects allegedly carried out their crypto fraud scheme. In August 2020, Li Yulin, former party secretary of the Bank of Huludao, and Li Xiaodong, former acting president, along with two others, were accused of embezzling 2.6 billion yuan by manipulating non-performing assets.
After the alleged embezzlement, the report states that they tried to cover their tracks. In September 2020, they allegedly converted over 1.8 billion yuan into foreign currency and transferred the money to company bank accounts in Hong Kong that they controlled.
Between September and October 2020, the suspects allegedly bought cryptocurrencies through WeChat groups, including one called “Longmen Inn”. They reportedly sold these cryptocurrencies abroad and converted the proceeds into US dollars, which were deposited into bank accounts controlled by the Hong Kong companies involved.
Chen Sentenced Ongoing Bank Case
While the mastermind behind the alleged money laundering scheme, Chen, received a sentence of 2 years and 3 months in prison along with a fine of 2 million yuan, the report indicates that legal proceedings concerning the former bank executives’ alleged misconduct are ongoing.
A similar case occurred when a Chinese student, Yang Qichao, alleged a crypto fraud scheme facing 4 years in prison. As regulatory frameworks for cryptocurrencies continue to develop, authorities will need to stay vigilant in combating the use of digital assets for illicit purposes.
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