Asia Express: Chinese Tether Laundromat, Bhutan’s Bitcoin Boost
Tether Laundering Network in China
In Gansu province, China, ten individuals received prison sentences ranging from 10 months to one year for their involvement in a Tether (USDT) laundering operation. This scheme, led by a man named Shen, involved a trading studio that facilitated the laundering of crypto profits from online gambling and telecom scams. The authorities recovered over $168,000 (1.2 million yuan) in illicit gains through this operation.
Shen and his team were aware that the cryptocurrency originated from illegal activities. They converted the illicit crypto into fiat currency at favorable exchange rates. The operation was set up in early 2022, with Shen recruiting several associates to assist in running the illegal transactions. They rented properties, equipped them with necessary tools such as computers and software, and carried out the laundering business via a trading group on the messaging platform Telegram.
The group conducted over-the-counter (OTC) deals in USDT, purchasing it at a discount from criminals involved in telecom fraud and selling it at higher rates to other customers. According to court documents, the group earned over $124,000 (880,000 yuan) from these operations, but their laundering activities facilitated the theft of over $834,000 (5.9 million yuan) from victims.
This case highlights China’s ongoing strict stance toward cryptocurrency. Despite rumors suggesting that China might lift its ban on crypto trading in the fourth quarter of 2024, authorities have shown no indication of making such a change. In August, the Supreme People’s Court in China revised the nation’s money laundering law to include virtual assets for the first time. Additionally, Beijing’s third plenary session in July placed renewed focus on promoting its central bank digital currency as the sole legal digital tender, while all other digital currencies, including Bitcoin, remain illegal for payments.
Bhutan’s Bitcoin Holdings Surge
The Kingdom of Bhutan has seen its Bitcoin holdings grow significantly, reaching over $830 million after a recent price rally. On September 16, Arkham Intelligence identified Bhutan as the fourth largest government holder of Bitcoin. Initially reported at approximately $758 million, the value of Bhutan’s Bitcoin holdings has climbed following Bitcoin’s price surge past $63,000 on September 19.
As of September 19, data from Arkham shows that the Royal Government of Bhutan holds 13,058 BTC, worth around $832.7 million. In addition, the government owns $1.6 million in Ether. Despite being a small landlocked nation with fewer than 800,000 people, Bhutan’s Bitcoin holdings are more than double the size of El Salvador’s, a country known for its Bitcoin adoption.
While El Salvador’s Bitcoin strategy has garnered global attention, Bhutan’s Bitcoin stash has grown quietly through mining operations managed by its sovereign wealth fund, Druk Holding and Investments. Arkham states that many governments with significant Bitcoin holdings acquire them through law enforcement asset seizures.
Cambodia’s Response to US Sanctions
Cambodia has pushed back against US sanctions targeting Senator Ly Yong Phat, who faces accusations of facilitating forced labor in online scam operations involving cryptocurrency. Cambodia’s government condemned the sanctions as politically motivated, highlighting Ly’s contributions to job creation and infrastructure development.
The US Treasury’s announcement on September 12 linked Ly’s businesses to forced labor and scam operations. The Treasury referenced a 2023 report from the Federal Bureau of Investigation (FBI) that found a 53% increase in cryptocurrency investment scams, many involving trafficked workers. US officials claim that Ly’s businesses were part of a network luring individuals into scam operations under false 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. Cambodia emphasized its ongoing collaboration with international partners, including the US, to address forced labor and cross-border crypto crime.
Binance and WazirX Dispute
The ongoing feud between crypto exchange Binance and WazirX has become public. Binance refuted claims from WazirX CEO Nischal Shetty that Binance controlled the majority of WazirX parent firm Zettai’s profits, which allegedly limited WazirX’s ability to compensate users affected by a massive July cyberattack.
During a town hall on September 16, Shetty suggested that WazirX had been sold in 2019, indirectly implicating Binance. However, Binance denied these allegations, stating that it never acquired or controlled
