Dirty Tether Laundry Service
A Chinese court in Gansu Province has sentenced ten individuals involved in a Tether (USDT) laundering scheme. The defendants received prison terms ranging from ten months to one year. Authorities recovered over $168,000 (1.2 million yuan) in illicit gains. The operation, led by a man named Shen, ran a USDT trading studio that laundered crypto profits from online gambling and telecom scams.
Shen and his team were aware that the cryptocurrency originated from illegal activities. They converted the illicit crypto into fiat currency at high exchange rates. Shen set up the operation in early 2022, recruiting several associates. They rented properties and equipped them with computers, software, and other tools necessary for their laundering business.
The group formed a trading network on Telegram, conducting over-the-counter (OTC) deals in USDT. They bought USDT at a discount from criminals involved in telecom fraud and sold it at higher rates to other customers. The court found that the group earned over $124,000 (880,000 yuan) through these operations. However, their business facilitated the theft of over $834,000 (5.9 million yuan) from victims.
China maintains a hard stance toward cryptocurrency. Despite rumors suggesting China might lift its ban on crypto trading in the fourth quarter of 2024, there has been no indication of such a move from the authorities. In August, the Supreme People’s Court revised the nation’s money laundering law to include virtual assets for the first time. Beijing remains focused on promoting its central bank digital currency as the sole legal digital tender.
Bhutan’s Bitcoin Investment Grows
The Kingdom of Bhutan recently saw its Bitcoin holdings grow by $70 million. Bhutan is now identified as the fourth-largest government holder of Bitcoin, with its holdings valued at over $830 million. This increase follows a small rally in Bitcoin prices.
As of September 19, Bhutan’s Royal Government holds 13,058 BTC, worth around $832.7 million, according to Arkham Intelligence. Additionally, the government owns $1.6 million in Ether. Despite its small population of fewer than 800,000 people, Bhutan’s Bitcoin holdings are more than double that of El Salvador, a country often spotlighted for its Bitcoin adoption.
El Salvador’s approach to Bitcoin has attracted global attention, but Bhutan’s stash has quietly grown through mining operations managed by its sovereign wealth fund, Druk Holding and Investments. Many governments with significant Bitcoin holdings acquire them through law enforcement asset seizures.
Cambodia Claps Back at US Sanctions Over Crypto Scam Ties
Cambodia’s government has criticized US sanctions targeting senator Ly Yong Phat, who faces accusations of facilitating forced labor in online scam operations involving cryptocurrency. Cambodia condemned the sanctions as politically motivated, highlighting Ly’s role in job creation and infrastructure development.
The US Treasury’s announcement follows reports of serious human rights abuses at Ly’s O-Smach Resort, where trafficked workers were forced to run crypto scams. The Treasury cited a 2023 FBI report that found a 53% increase in cryptocurrency investment scams, many linked to trafficked workers running digital fraud schemes. US officials claim that Ly’s businesses were part of a network luring individuals into scam operations under false employment pretenses, subjecting them to abusive working conditions.
Cambodia’s Ministry of Foreign Affairs criticized the reliance on the US Trafficking in Persons Report, arguing it presents an incomplete picture of the country’s efforts to combat human trafficking. They highlighted Cambodia’s ongoing collaboration with international partners, including the US, to address forced labor and cross-border crypto crime.
Binance and WazirX Feud
Crypto exchange Binance has publicly disputed claims from WazirX CEO Nischal Shetty and his legal team. Shetty suggested that Binance controlled the majority of WazirX parent firm Zettai’s profits, limiting their ability to compensate users affected by a massive July cyberattack.
During a town hall streamed on September 16, Shetty claimed that WazirX had been sold in 2019. Although Shetty did not mention Binance by name, it was clear that the opposing party was the world’s largest exchange. Binance was referenced in a slide presented by the legal team during the town hall.
Binance firmly denied these allegations, reiterating that it never acquired or controlled WazirX. According to Binance, a deal was proposed but never finalized due to Zettai’s failure to meet its contractual obligations. On July 18, a hacker stole over $230 million from WazirX, making it the second-largest cryptocurrency hack of
