The country's first case of using USDT to launder gambling funds, involving over 100 million yuan
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The country's first case of using USDT to launder gambling funds, involving over 100 million yuan
This case is the first in the nation to be cracked involving the use of USDT for operating a fourth-party payment platform.
Navigating Web3 tides with focused insightsBy Zhang Luyao, Yangcheng Evening News Media Group
Recently, public security authorities in Huizhou successfully dismantled a criminal gang involved in cross-border online gambling and illegal operations using a USDT (Tether) "money running" platform. So far, 77 suspects including Wu Mouping (male, from Huizhou) and Zeng Moupei (male, from Huizhou) have been arrested. Three online gambling websites were taken down, over 100 million yuan in illicit funds were identified, and more than 2 million yuan in gambling-related assets were seized or frozen. This case is reportedly the first nationwide investigation to crack down on a fourth-party payment platform operating via USDT.
Cross-border gambling sites use USDT for "money running" to launder gambling funds
In early April 2020, Huizhou public security authorities discovered clues indicating that someone was widely promoting an app called "U Pay," a USDT-based money-running platform, within social media groups both inside and outside China. The Huizhou police immediately established a special task force to launch an investigation.
The investigation revealed that a criminal group led by Wu Mouping purchased overseas servers to set up three gambling websites—“Hengda VIP Club,” “Russia Entertainment City,” and “Italy VIP Club”—offering games such as Baccarat,时时彩 (Lottery-style number games), and Beijing Racing. Members of the gang had clear divisions of labor: one team promoted the gambling websites and recruited gamblers, while another operated a USDT-based money-running platform to provide illegal payment settlement services for overseas gambling websites. The group even claimed itself to be the “nation’s most secure fourth-party payment system.”
Items seized by police
What is "USDT"? What does "money running" mean? According to investigators, USDT, also known as Tether, is a blockchain-based digital currency issued by a foreign company, pegged 1:1 to the U.S. dollar. Due to its stable value and anonymity, it has become a favored channel for criminals to conduct "money running."
This method of money running became a major selling point used by the gang to attract gamblers.
The money-running platform attracted numerous participants who registered as members and took part in bidding to help launder funds. Participants bought USDT with RMB and provided recharge codes to the platform. These codes were pooled into a virtual currency fund and then supplied to overseas gambling sites through top-up interfaces.
Suspect turns to "entrepreneurship" after being scammed, runs multiple black-market operations
On June 8, 2020, the task force learned that the gang was about to relocate overseas, prompting immediate arrest operations. To date, 77 suspects including Wu Mouping and Zeng Moupei have been apprehended. Three online gambling websites and five criminal studios—including three controlling cross-border online gambling operations and two engaged in website order-padding and money laundering—have been destroyed. The investigation confirmed over 100 million yuan in illicit funds, with more than 2 million yuan in gambling-related assets seized or frozen.
Items seized by police
Police found that the transnational gambling group led by Wu Mouping consisted of three gambling teams and two money-running platform studios.
First, a money-running platform studio led by Tang Mouxuan and Wu Molang, consisting of seven people, primarily responsible for promoting the money-running platform and providing money laundering services for cyber black- and gray-market activities. Second, a promotional studio for the money-running platform led by Qin Mou, comprising two individuals, mainly assisting Wu Mouping in promoting the platform, acquiring clients, and connecting with online black-market operations. Third, an online gambling studio led by Zeng Moupei, with 13 members, mainly helping Wu Mouping promote the gambling platform, recruiting gambling customers, and providing gambling services. Fourth, an online gambling studio led by Zhu Mou, with eight members, also assisting Wu Mouping in similar tasks. Fifth, an online gambling studio led by Zhong Moyuan, with three members, performing the same functions.
Notably, suspect Wu Mouping previously worked in a telecom network fraud group, where he acquired technical skills. A self-proclaimed gambling addict, he claimed to have lost over 1 million yuan after being scammed ("blackmailed") by others, which prompted him to start his own criminal "business." He acted as boss, technician, and marketer all at once. The gang not only offered cross-border online gambling services but also ran various other black- and gray-market operations, including money laundering and illegal online financial services.
Original link: http://news.ycwb.com/2020-10/22/content_1235802.htm
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