Hubei Police Dismantle Tether Fraud Scheme Involving 300,000 Yuan

In a significant crackdown on financial fraud, the Hubei Internet Police recently dismantled a sophisticated Tether fraud operation that involved domestic "mule" assistance. The case began in January when a resident of Victory Town, identified as Xiao Li, was targeted by a fraudster posing as an active-duty soldier on a dating platform. The fraudster, who went by the name "Wang," lured Xiao Li into an encrypted chat app, citing strict military discipline as the reason for using a secure communication method.

Over time, "Wang" introduced Xiao Li to an investment platform, claiming it was an internal channel of a financial company. The platform showed impressive returns, with account balances jumping from 100,000 to 300,000 yuan. Unbeknownst to Xiao Li, the platform was a virtual program controlled by fraudsters, and the profits were fabricated numbers manipulated on the backend.

When Xiao Li began to "recharge" on the platform, the fraud gang dispatched multiple "couriers" to collect cash offline. These individuals, dressed casually, would appear at agreed-upon locations to collect the money. After counting the cash, they would convert it into virtual currency, completing a crucial step in laundering the ill-gotten gains. On March 28th, after the final 30,000 yuan was taken, "Wang" suddenly went out of touch, leaving Xiao Li to realize she had been scammed out of tens of thousands of yuan.

Upon receiving the report, the Criminal Investigation Brigade of the Luotian County Public Security Bureau formed a special task force to launch a "dual-track tracing" investigation. Through fund flow analysis and technical investigation, the police discovered that the criminal gang operated with "overseas command, domestic execution." The "military officer boyfriend" was actually an overseas fraudster, while the "couriers" active in the country were a money laundering gang helping to transfer funds.

According to the suspects' confessions, the gang received instructions through overseas chat apps and engaged in offline transactions with victims after each order. After collecting cash, they purchased USDT (Tether) below market price and transferred it to an "online" wallet, taking advantage of the anonymity of virtual currency to evade supervision. To avoid detection, they often wore masks, hats, and frequently changed modes of transportation during cash withdrawals.

These "couriers" earned a commission of 3%-5% each time, driven by greed, leading them to become accessories to the crime. The police have currently recovered 130,000 yuan of the victims' losses, frozen suspicious funds of 300,000 yuan, and taken criminal coercive measures against 4 suspects according to the law. The case is under further investigation.

The police stated that Tether, like Bitcoin and Ethereum, is a type of encrypted virtual currency. Due to its transactional anonymity and convenience, it has become the most "preferred" money laundering medium for fraudsters. This case highlights the growing sophistication of financial fraud operations and the need for enhanced vigilance and regulatory measures to combat such crimes.