Representatives of the municipal security bureau of the city of Chengdu in Sichuan province in southwestern China announced the cessation of the activities of an illegal cryptocurrency bank. The organization provided, authorities say, financial services to groups of smugglers and individuals wishing to withdraw their money through cryptocurrencies to other jurisdictions.

To evade currency regulation, the bank used the USDT stablecoin in its work. Payment transactions worth 13.8 billion yuan ($1.9 billion) were processed through the organization, the investigation assures. Chengdu prosecutors found that the crypto bank began operating in January 2021 and maintained branches in 26 provinces of the country.

Bank personnel transferred funds abroad, exchanging foreign currencies for the smuggling of medicines and cosmetics, bought assets in other jurisdictions, and helped companies from China evade taxes.

Several hundred people were arrested, including the organizers of the underground business. Bank cards and other payment instruments were seized, and funds worth tens of millions of dollars were frozen. The suspects are charged with smuggling, financial fraud using virtual assets, and tax evasion fraud. The Chengdu City Prosecutor's Office is preparing an indictment and transferring the case to the Sichuan Provincial Court.

Earlier, the Public Security Bureau of the Chinese city of Panshi reported on an underground crypto platform where virtual currency was used for transactions in Chinese yuan and Korean won. Six suspects have been detained.