China's Shanghai police have arrested a criminal gang operating an illegal cross-border virtual currency business through a self-built platform, with the case involving 200 million yuan.

The Hongkou District Public Security Bureau of Shanghai, China recently cracked a case involving cross-border illegal settlement and illegal foreign exchange trading using virtual currency, arresting 9 suspects with the case involving over 200 million yuan. Since early 2024, suspect Li and his accomplices established a tech company to pursue illegal profits, building two online platforms: "Cross-Border Fund Exchange" and "Virtual Credit Card Issuance and Settlement". They solicited customers both online and offline, illegally conducting exchange and settlement services for virtual currency and cross-border funds, and reaped illegal gains by charging transaction fees, consumption service fees, card issuance fees, withdrawal fees, and other charges. Investigators stated: "The particularity of this case is that the criminals developed two apps and solicited customers on such a large scale publicly, which is unprecedented. The platforms built in this case form a closed-loop illegal financial service system, with all transactions settled internally on the platforms. This criminal model is more large-scale, has a longer chain, and is more deceptive." According to reports, on the "Cross-Border Fund Exchange" platform, the criminal group collects virtual currency from overseas customers, converts it into foreign currencies to form a "fund pool", then conducts cross-border foreign exchange settlement by fabricating false contracts and other means to realize the exchange and transfer between virtual currency and RMB. On the "Virtual Credit Card Issuance and Settlement" platform, the group "cooperated" with multiple overseas private banks to issue virtual credit cards to customers, who could use the cards for consumption but were required to settle repayments in virtual currency. The group converted virtual currency into foreign currencies overseas and completed clearing with overseas card merchants through false cross-border foreign exchange settlement.