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Defendants receive heavy fines
The Beijing court implemented what many within the crypto community described as harsh laws after an alleged illegal transaction. The five men were accused of transferring $166 million overseas, making it one of the biggest cryptocurrency cases this year. Court documents show that the defendants used renminbi (RMB) to purchase stablecoins through local channels such as digital asset exchanges.
Tokens were transferred to wallets before cross-border exchange. The assets were converted into foreign currency before being used for international payments. In total, the defendants facilitated approximately RMB 1.2 billion, equivalent to about $166 million, in various transactions. A major point of the indictment was that the transaction took place outside of regulated banking channels.
As a result, the court ruled that it constituted covert foreign exchange trading and violated China’s Anti-Money Laundering Law and Foreign Exchange Administration Regulations. The court sentenced the defendants to prison terms and imposed fines based on their level of participation.
The main defendant was sentenced to four years and six months, in addition to a fine of 200,000 RMB, equivalent to approximately $28,000. Two other associates involved in the transfer received sentences of three years and nine months, with fines of RMB 150,000 ($21,000). Meanwhile, the remaining defendants were sentenced to two years and eleven months in prison, as well as a fine of RMB 100,000 ($14,000).
This follows a rise in cases related to China’s cryptocurrency crackdown, with authorities citing increased allegations of money laundering. Even though several cryptocurrency users supported regulations to curb bad actors, many analysts considered this ruling as harsh and emphasized an impact on market sentiments. According to critics on social media, the crackdown was aimed at limiting the influence of stablecoins and enforcing fiat controls.
Stablecoin adoption reached new heights over the past six months as traditional investors turned to the asset class to reduce transfer fees. Companies are now incorporating stablecoin options and exposing assets. These inflows are bullish for the broader market as investors gain key exposure. China’s crypto community has also called for yuan-based assets to compete with dollar-backed options.
