Chinese authorities, operating out of the Mongolian city of Tonglio, have arrested 63 people involved in a massive money laundering scheme. The criminal group allegedly laundered 12bn Chinese yuan ($1.7bn) in tether stablecoin (USDT), and was helping both domestic and foreign criminal groups to launder money by using digital virtual currency transactions and exchanges.

According to the statement from law enforcement, the investigation began when a local bank noticed a significant amount of deposits coming in, totaling over 10m yuan ($1.44m), which triggered the bank’s anti-money laundering protocols.

Allegedly, the gang started its operation in May 2021, using Telegram to recruit new members who would open crypto exchange accounts. The members would then be rewarded with a commission based on how much they had laundered, converting the USDT back into Chinese yuan.

Confiscated money

It took three months for the Chinese authorities to crack down. More than 200 police officers were sent out to 17 provinces to carry out the operations.

The authorities mounted a series of raids and confiscated around $18.6m from the group. They found 32m yuan ($4.6m) in cash and more than 18m yuan ($2.9m) in fixed assets. They also seized and transferred more than 75m yuan ($10.8) of the lian digital currency, and more than 5m yuan ($0.7m) of funds involved in the case were frozen.

“We finally successfully solved the case through multiple methods such as interrogation of the persons involved in the case, investigation of overseas digital currency exchanges, and digital currency blockchain tracking,” the statement said.