The Public Security Bureau of Panshi City in Jilin Province has knocked down an illegal operation involving underground banks and virtual currencies, exposing a staggering $300 million crypto fraud. The investigation led to the arrest of six individuals suspected of engaging in criminal activities related to money laundering between China and South Korea, according to a report from ChinaNews.com.
According to the local news report, masterminds behind the scheme took advantage of the anonymous and decentralized nature of virtual currencies to carry out illicit exchange operations between the Chinese Renminbi (RMB) and the South Korean Won, facilitating large-scale money laundering activities across borders.
The initial breakthrough in the case came from the Economic Investigation Brigade of the Panshi City Public Security Bureau.
The investigation has uncovered leads that showed Jin Moudong, a resident of Jilin, and his accomplice, Shen Mou, were running currency exchange businesses in both China and South Korea.
The suspects would lure unsuspecting individuals into fraudulent transactions before escaping back to China.
Police Identify Bank Accounts Associated With Scheme
The police managed to identify bank accounts associated with Moudong and Mou. The accounts exhibited substantial transaction volumes, frequent inflows and outflows of funds, a diverse customer base, and transaction patterns consistent with illegal underground banking activities.
Chinese authorities have cracked down on a major crypto exchange fraud scheme, seizing $300M. The operation highlights China's stance against financial crime and the importance of regulatory compliance in the digital asset space.
— Kelvin Zinck (@KelvinZinck) May 13, 2024
A task force – formed to delve deeper into the financial activities, social connections, and organizational structure of the criminal network – apprehended Moudong and Mou, yielding a substantial haul, including numerous bank cards and tools used in the commission of the crimes.
Further investigation revealed that the criminal network engaged in a range of illegal activities, including using domestic accounts to receive and transfer funds, conducting over-the-counter (OTC) trades of virtual currencies, and settling transactions in Korean Won.
The operation primarily catered to Korean purchasing agents, cross-border e-commerce platforms, and import-export trading companies, providing them with the means to exchange RMB for Korean Won and vice versa. This enabled the criminals to evade detection while facilitating the unlawful movement of vast sums of money.
April Records Lowest Crypto Hack Losses
Overall, the cryptocurrency industry witnessed a notable decline in combined losses from hacks and scams during the month of April 2024. According to recent data from CertiK, the month marked the lowest recorded amount since they began tracking such data in 2021, with approximately $25.7 million lost to exploits, hacks, and scams.
Explore: Bitcoin Scam Guide – Avoiding Theft and Fraud
Of the total, flash loan attacks accounted for $129,000 in losses, with the largest incident resulting in $55,000 in damages.
This represents the lowest number of flash loan attacks since February 2022.
However, $4.3 million was lost to exit scams.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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