The Public Security Bureau of Panshi City in Jilin Province has busted an illegal operation involving underground banks and virtual currencies.
According to a ChinaNews.com report, the case, which involved some 2.14 billion yuan (about $300 million), led to the arrest of six people suspected of involvement in criminal money laundering activities between China and South Korea.
The suspects took advantage of the anonymous and decentralized nature of virtual currencies to conduct illegal exchange operations between the Chinese renminbi (RMB) and the South Korean won.
The illegal scheme enabled them to facilitate large-scale cross-border money laundering. Authorities learned of the operation through the Panshi City Public Security Bureau’s Economic Investigation Brigade .
During their investigation, they uncovered key clues pointing to the involvement of Jin Moudong, a Jilin resident, and his associate, Shen Mou, in the operation of currency exchanges in China and South Korea.
After gathering substantial evidence, police discovered that bank accounts linked to Jin Moudong and Shen Mou showed significant transaction volumes. The accounts had frequent inflows and outflows of funds, a diverse customer base and transaction patterns consistent with illegal underground banking activities.
Using this information, police formed a task force to further investigate the financial activities, social connections and organizational structure of the criminal gang. After analysis, they were able to detain Jin Moudong, Shen Mou and their associates.
As a result of law enforcement efforts, a significant number of bank cards and tools used to commit crimes were confiscated.
The investigation revealed that the criminal network in question conducted various illegal activities, such as using domestic accounts to receive and transfer funds, conducting over-the-counter (OTC) transactions in virtual currencies, and settling transactions in Korean won.
Their activities targeted Korean purchasing agents, cross-border e-commerce platforms and import-export trading companies, providing them with the means to exchange RMB into Korean won and vice versa.
