China Police Said To Detain Crypto OTC Traders Amid Money Laundering Crackdown

As Chinese police step up efforts to clamp down on unlawful business actions, crypto over-the-counter (OTC) merchants are being detained to help investigations.

In one other signal Chinese legislation enforcement are concentrating on cryptocurrency buying and merchandising, Zhao Dong – a outstanding Chinese crypto OTC dealer and the co-founder of crypto lending platform RenrenBit – has been delayed by police inside the metropolis of Hangzhou. A rumor that Zhao had been taken away first emerged on WeChat on Thursday, after a display screen seize describing his detention started current inside the local people and was later reported by native information retailers.

As the rumor drew wider consideration given Zhao’s outstanding standing, a advisor of RenrenBit expressed in an announcement on the social media platform Weibo that one anon. OTC buying and merchandising desk in Beijing had its complete group taken away by police late final month.It doesn’t seem that any of the OTC merchants had been outright arrested.

RenrenBit expressed Zhao, who has endowed inside the OTC group yet was not concerned in day-to-day trades, returned to China from Japan in early June and is now “actively” aiding native police in anti-fraud and anti-money washing investigations.

In 2019, the Chinese regime prohibited native crypto exchanges from permitting trades between cryptocurrency and Chinese yuan. Many merchants turned to OTC platforms in consequence, which primarily allow peer-to-peer buying and merchandising by copulative patrons and sellers. Individual customers in China have been tally on OTC desks to purchase or promote USDT or bitcoin with Chinese yuan to participate in crypto-to-crypto buying and merchandising.

An individual with direct data of the problem, requesting anonymity because of the sensitivity of the case, advised CoinDesk that Zhao is presently being held by police yet added that is systematic effort, not an remoted incident. The subject has in addition sparked some worry amongst different OTC desks in China, the particular mortal expressed.

The particular mortal expressed legislation enforcement companies throughout Chinese provinces have elevated their examination over crypto OTC desks since mid-June, and have taken away multiple buying and merchandising desk to help on investigations associated to money-washing actions.But the information about Zhao has drawn wider consideration since he’s well-known as one of many largest OTC merchants in China, and has been a member of China’s crypto neighborhood since 2013.

Although the current investigations don’t essentially recommend shopping for or promoting cryptocurrency via OTC is prohibited, a extra systematic goal power have a large ripple impact on OTC desk operations in China, which stay a big a part of native crypto commerce.

The newest motion by Chinese police follows a large checking account freeze reported in early June, the place greater than 1,000 folk had been estimated to have been affected. At the time, a variety of OTC desks and customers in China had their business institution accounts frozen by legislation enforcement after being suspected of both knowingly or inadvertently facilitating criminality, resembling telecom frauds or ponzi schemes, to wash payof by way of crypto OTC buying and merchandising.

Cryptocurrencies, particularly the dollar-pegged USDT, have been a preferred proficiency for Ponzi schemes or fraud organizers to wash cash China, which power then contaminate the fiat cash and cryptocurrencies which are current inside the Chinese OTC market.

Law enforcement’s investigations of those unlawful schemes are a solution to observe the circulation of contaminated fiat cash and crypto holding. Users or OTC desks who even inadvertently contact these questionable holding power need their business institution accounts frozen.


The chief in blockchain information, CoinDesk is a media outlet that strives for the very best print media requirements and abides by a strict set of editorial insurance policies. CoinDesk is an unbiased working subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

China Police Said To Detain Crypto OTC Traders Amid Money Laundering Crackdown

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