Shanghai Court Sentences Five in $29 Million Crypto-Forex Scheme

The Shanghai Jing’an District People’s Procuratorate reported that the defendants received prison sentences ranging from two and a half to six years, alongside fines reaching 1.5 million yuan, or approximately $220,780. Investigators uncovered that the operation, which spanned three years, catered to wealthy clients seeking to move funds overseas for property acquisitions, education, or emigration purposes.

State regulators flagged the activity in July 2024 after detecting anomalous transactions linked to a shell company. Prosecutors noted that the group relied on the pseudonymous nature of on-chain transfers to obscure the movement of funds, a tactic that complicates traditional financial oversight. One central figure, identified by the surname Gao, allegedly processed roughly $25 million in illegal transactions before launching a competing currency conversion business.

This ruling aligns with a broader state initiative to dismantle underground banking. In the first half of 2025 alone, the State Administration of Foreign Exchange investigated more than 400 cases of illicit currency movement. While mainland China maintains a comprehensive ban on cryptocurrency trading, authorities increasingly view digital tokens—particularly stablecoins like USDT—as primary channels for bypassing annual $50,000 individual currency quotas. As enforcement intensifies, judicial focus has shifted toward the recovery of electronic evidence and the dismantling of agent networks that bridge the gap between local fiat and global digital asset markets.