‘Thunder Attack’ Busts $1.7B Tether-fueled Money Laundering Ring

Chinese authorities say they’ve arrested 63 people in a self-styled “thunder attack” on a money laundering gang suspected of washing more than $1.7 billion via crypto. 

In a coordinated bust, the Horqin branch of the Tongliao Public Security Bureau in northeastern China dispatched more than 200 police across 17 provinces and municipalities, according to a statement.

It took more than three months to dismantle the ring, police said, who noted the gang used leading stablecoin tether (USDT) to launder gambling and other illicit proceeds on behalf of domestic and foreign criminal groups. 

Roughly $18.6 million in cash and assets have been seized. The gang allegedly persuaded individuals via Telegram to register accounts with crypto exchanges — mules for criminal funds. 

The gang was described to have a clear division of labor, with its operations stretching across China. Once the gang accepted money laundering requests, related tasks were assigned to teams, with leaders recruiting bottom-level grunts to carry out actions online and offline.

All gang members reportedly received commissions in different proportions after each money laundering operation was completed.

Authorities said the retrieval of assets has been complicated but blockchain analysis and work with international crypto exchanges eventually led to several persons being interrogated.

Investigations began after suspicious banking activity was detected in June, including some monthly transactions exceeding $1.4 million.

After preliminary investigations, the Horqin branch dispatched some 230 officers on Sept. 7 to Liaoning, Jilin, Heilongjiang, Guangdong, Fujian and Henan, among other provinces. 

By that time, two major suspects of the criminal gang had fled to Bangkok, Thailand but were successfully persuaded to return back to China a month later, police said.

The bust follows another from September, in which authorities claimed to have arrested 93 people for their involvement in a crypto money laundering ring valued at $5.6 billion.

Money laundering in crypto has long been a hot topic of debate. While such activity has increased over the years, analytics unit Chainalysis attributed $8.6 billion in crypto transaction volume to money laundering last year, just 0.05% of the annual total volume.

Between $800 billion and $2 trillion is estimated to be laundered via fiat currencies every year. The firm however warns money laundering in crypto could continue to rise alongside adoption.

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