Shanghai Police Bust Major Underground Banking Case: Nearly $20 billion Involved in Cross-Border Money Laundering Using Cryptocurrency

BlockBeats News, August 27th. According to The Paper, the Shanghai Public Security Bureau held a press conference today. Since the beginning of this year, the Shanghai police have cracked multiple cases of illegal business and money laundering using cryptocurrency as a medium, arrested more than 70 criminal suspects, with the involved amount exceeding 20 billion yuan.

In January 2026, the Shanghai police economic investigation department found during an online patrol that someone was promoting foreign exchange services on a web platform. After comprehensive assessment, the police believed there were suspicions of economic crimes involved and thus launched an investigation.

Upon investigation, since August 2024, criminal suspects Liu, Xu, Gao, Wang, and others sought illicit gains by soliciting clients needing foreign exchange services both online and offline using cryptocurrency as a settlement method without approval from the relevant Chinese authorities. They conducted RMB-to-foreign currency exchanges through a process of back-to-back transactions involving cryptocurrency and domestic and overseas funds, unlawfully collecting service fees based on a certain percentage.

During the probe, the police discovered that this criminal group had a clear structure and division of labor. Liu was responsible for coordinating client needs, contacting cryptocurrency dealers, and issuing transfer instructions. Xu, Gao, and others recruited individuals, opened multiple bank accounts in bulk for the syndicate to consolidate and circulate the exchanged funds, while Wang specifically operated the implicated accounts and transferred client funds. Specifically, once clients transferred RMB to the syndicate-controlled accounts, the syndicate engaged with cryptocurrency dealers to purchase cryptocurrency, which was then sold through overseas channels and exchanged for foreign currency, delivered to the clients' designated overseas accounts, achieving an illegal exchange of "RMB-cryptocurrency-foreign currency."

With solid evidence in hand, starting from April 2026, the Shanghai police economic investigation department launched a series of arrest operations, apprehending 19 criminal suspects. Currently, Liu, Xu, Gao, Wang, and five other criminal suspects have been arrested on charges of illegal business operations and aiding internet criminal activities, approved for arrest by the prosecuting authority. The remaining suspects have been placed under criminal coercive measures by the police, and the case is under further investigation.