Shanghai Court Sentences Individuals for 6.5 Billion Yuan in Illegal Tether Transactions

On July 16, 2025, the Pudong New Area People's Court in Shanghai concluded a significant case involving illegal cross-border cryptocurrency exchanges. The court sentenced individuals, including Yang and Xu, for facilitating 6.5 billion yuan in Tether transactions from domestic shell companies. The case was made public on July 20, 2025.

The illegal exchange mechanism involved splitting foreign exchange transactions that should be under regulatory oversight into two independent operations, thereby evading supervision. This case highlights the persistent underground demand for stablecoin remittances despite the 2021 ban on crypto trading in China. The proceedings underscore China's ongoing effort to curb cryptocurrency-based capital flight and enforce strict regulatory oversight.

The case serves as a stark reminder of the legal repercussions of engaging in illicit activities within the cryptocurrency space. The magnitude of the transactions, totaling 6.5 billion yuan, indicates a significant operation that likely involved sophisticated methods to evade detection. The use of Tether, which is pegged to the value of the US dollar, suggests that the perpetrators sought to leverage the stability and liquidity of the cryptocurrency to facilitate their illegal activities.

The court's decision is expected to have broader implications for the cryptocurrency industry, particularly in China. It sends a clear message to both domestic and international players about the need for compliance with regulatory standards and the consequences of non-compliance. The case also underscores the importance of robust regulatory frameworks to prevent the misuse of digital currencies for illegal purposes.

The sentences handed down to Yang and Xu are a significant development in the ongoing efforts to curb illegal activities in the cryptocurrency space. The case serves as a cautionary tale for those involved in the industry, highlighting the need for transparency, accountability, and adherence to legal standards. As the use of cryptocurrencies continues to grow, it is crucial for regulatory bodies to remain vigilant and proactive in addressing potential risks and ensuring the integrity of the financial system.