Shanghai Police Arrests Gang Running Cross-Border Illegal Operation of Virtual Currency on Self-built Platform, Involving 200 Million Yuan

BlockBeats News, August 28. The Hongkou Public Security Sub-bureau in Shanghai, China recently uncovered a case of using virtual currency for cross-border illegal settlement and illegal foreign exchange transactions, arresting 9 criminal suspects and involving an amount of over 200 million yuan.

The criminal suspects including Li Mou and others, since the beginning of 2024, established a technology company to seek illegal profits, setting up two platforms, "Cross-border Fund Remittance," and "Virtual Credit Card Issuance and Settlement," on the Internet, attracting customers online and offline to illegally conduct exchanges and settlements of virtual currency and cross-border funds, and unlawfully profit through charging transaction fees, service fees, card fees, and withdrawal fees.

The investigators stated, "The uniqueness of this case lies in the fact that the criminals developed two separate APPs, openly soliciting customers on such a large scale, which is unprecedented. The platforms built in this case are themselves a closed-loop illegal financial service system, where all transactions are settled internally within the platform. This type of criminal model is characterized by a higher level of scale, longer chain, and greater deceitfulness."

According to reports, on the "Cross-border Fund Remittance" platform, the criminal group overseas received customers' virtual currency, exchanged it for foreign currency, creating a "fund pool," then used fabricated contracts to settle cross-border payments, achieving the conversion and transfer of virtual currency to Chinese yuan. On the "Virtual Credit Card Issuance and Settlement" platform, the criminal group "collaborated" with multiple overseas private banks to issue virtual credit cards to customers. Customers could use the card for consumption, and the repayment process had to be settled with virtual currency; the group exchanged the virtual currency for foreign currency overseas, relying on falsified cross-border settlements to settle with overseas card issuers.