The world’s leading stablecoin, Tether has been engulfed with many controversies. In the latest development, the People’s Bank of China has revealed a high profile case of crack down on cross-border gambling websites that used the stablecoin USDT. It is important to know that gambling and casinos are illegal in mainland China, and cryptocurrencies such as Bitcoin, privacy coins as well as other stablecoins have been widely used for the purpose of gambling management, making it difficult to track funds.
According to reports, a local branch in Huizhou, Guangdong People’s Bank of China [PBoC], cooperated with local police along with other Chinese authorities to crack down on three gambling sites involving USDT. In the meanwhile, they also arrested at least 77 suspects.
The report further said that the arrests were made over alleged money laundering accused the perpetrators of hiding funds received via illegal online gambling activity. In addition to this, the total amount reportedly involved in the said laundering case is said to be approximately 120 million Yuan [around $18 million].
Tether [USDT] Wreaking Havoc in China
In recent times, the Chinese authorities have been ramping up its efforts to crack down on cross-border gambling that involves crypto-assets. In a conference that took place in February, the Ministry of Public Security asserted that it has boosted significant efforts against gambling. According to a report by Global Times, the public security organs across China have handled over 8,800 cross-border gambling cases, and have arrested more than 60,000 criminal suspects after identifying over 1 trillion Yuan in gambling-related funds, and has also frozen a bunch of illicit funds.
Additionally, the police in China’s Guangdong province have been freezing bank accounts of over-the-counter [OTC] cryptocurrency buyers and sellers in the country. The authorities have also frozen accounts even when there were no trading activities for several months. And interestingly, they claim that stablecoin Tether [USDT] is frequently used in illicit activities. Due to rising cases such as these, the police were reportedly learning about blockchain and on-chain analysis in a bid to trace the movement of cryptocurrencies.
Responding to the news, Jon Evans, the CTO of the software consultancy HappyFunCorp stated,
“If the rise of Tether is largely about clandestine money laundering / transfers from China to Macau (which has massive gambling and no currency controls) then that will be an interesting twist”