Jiangsu police dismantle a virtual currency money laundering platform with 860 million yuan in transaction volume over three months
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Jiangsu police dismantle a virtual currency money laundering platform with 860 million yuan in transaction volume over three months
Shenzhen Jinghui, along with money changers and merchants, used "money muling" platforms to conduct virtual currency trading, providing financial settlement services for other cybercrimes and illegally profiting individually.
Navigating Web3 tides with focused insightsOn October 21, Yangzhou Public Security Bureau's Development Zone Branch announced that during the "Clean Net 2020" special operation, it cracked a case involving a fourth-party platform providing "money laundering services" (commonly known as "running points") for online loan apps. Within just three months, the platform processed financial transactions amounting to 860 million yuan—making it the largest such "running points" platform dismantled so far in Jiangsu Province.
A Young Man Falls into a High-Interest Loan Trap via Online Lending
Liu (a pseudonym) works in the development zone and earns a modest salary, barely covering his monthly expenses. In early March this year, after dining out with friends, Liu overspent beyond his disposable income, leaving him short on living expenses. At that moment, needing urgent funds, he recalled a friend mentioning unsecured loans available online. He found an online lending app through which he could borrow 2,500 yuan for five days at an interest of only 12.5 yuan. Finding this acceptable, Liu submitted the required documents and applied for the loan as instructed by the app.
To his surprise, although he applied for a 2,500-yuan loan, only 1,375 yuan actually arrived in his account. Puzzled, Liu contacted customer service and was told the deducted amount was a service fee—an industry practice commonly referred to as "front-loaded interest." Even more unexpectedly, when Liu failed to repay within five days, the interest began doubling daily, quickly escalating beyond his ability to pay.
Driven to Despair by Aggressive Debt Collection, Victim Reports Case to Police
Liu had heard about high-interest online loans before but never imagined the rates could be so exorbitant. Initially, he tried hard to raise money, making up various excuses to borrow from relatives and friends. However, the speed at which interest accrued far outpaced his repayment efforts. Eventually, he could no longer borrow any more money and didn't dare tell his family, living under immense stress every day. Some people told Liu that defaulting on such online loans wasn’t a big deal—that nothing serious would happen. This brought him slight relief; feeling he had already repaid much of the principal and interest, and receiving no follow-up calls for several days, he hoped the matter might simply fade away. After all, since everything was done online, what could the lenders really do?
Just as Liu began to feel a glimmer of hope, collection calls from the lending app started coming in. At first, he made excuses to delay payment, and the callers didn’t press further. But as Liu continued to default, the number of collection calls increased, accompanied by escalating threats. Still, Liu had no way to make the payment.
Later, Liu received a call from a relative asking whether he had taken out some kind of loan—the debt collectors had reached them. Soon afterward, staff from the lending app called Liu directly, threatening to contact all his relatives, friends, and coworkers unless he repaid immediately, accusing him of being a deadbeat borrower. Panicked, Liu realized he wouldn't be able to face society if this happened. With no other options, he decided to report the case to the police.
Following the Clues, Police Uncover a Fourth-Party "Running Points" Platform
Upon receiving the report, the Development Zone police took immediate action and launched an investigation. Through extensive preliminary investigations, officers discovered that there was no direct financial transaction between Liu and the online lending app itself. The account that transferred money to Liu’s bank account was unrelated to the app, and when Liu attempted repayment, he was directed to transfer funds to yet another different account. The entire process involved numerous accounts with no apparent connection among them—raising suspicion. By tracing these leads and analyzing accumulated evidence, investigators found that all transactions were somehow linked to a virtual cryptocurrency network. Ultimately, after thorough tracking, a fourth-party platform facilitating "running points" for online lending operations emerged.
Police found that apart from the standard triad of online lending apps, borrowers, and lenders, there existed a fourth party. This fourth party transacted with the other three using a points-based system: lenders converted their funds into points via the fourth-party platform, conducted transactions using those points, then redeemed the points back into actual funds through the same platform. Thanks to this "running points" mechanism, transactions among the parties became randomized and flexible, with no fixed counterparties. Moreover, no visible links appeared on financial records, making such illegal activities extremely difficult to detect—and even if detected, nearly impossible to trace back to interconnected parties, thus evading law enforcement scrutiny.
The Takedown of a Massive Online Lending "Aircraft Carrier" Reveals Staggering Figures
As the investigation deepened, police realized this fourth-party platform functioned like an online lending "aircraft carrier," serving over 100 online lending apps through its "running points" infrastructure. Further investigation identified Liu (no relation to the victim), the mastermind behind the platform, who was subsequently arrested.
During interrogation, authorities learned that in June 2019, suspect Liu colluded with Liao and Long to establish Shenzhen XXX Technology Co., Ltd. The trio divided responsibilities: Liu served as the actual operator managing overall company operations; Liao acted as legal representative and product manager; and Long led technical development. They recruited personnel to develop, operate, and maintain software for the "running points" settlement platform. The company also provided web interfaces for online lending merchants to collect borrower information and facilitate disbursements and repayments. Additionally, Liu and associates partnered with individuals like Ang to integrate various merchant wallets such as "Mini Wallet" and "Golden Beans," creating payment channels for fund transfers. They also recruited teams led by Guo, Chen, and others to conduct settlement services (i.e.,代pay/代collection) on the "running points" platform. Shenzhen Jinghui, settlement agents, and merchants used the platform to trade virtual currencies, enabling financial settlements for other cybercrimes while each profiting illegally.
Due to data destruction and deletion by suspects during arrest operations, investigators recovered transaction records covering only three months. Even within this limited timeframe, cumulative settlement volume reached 860 million yuan, with users withdrawing a total of 60 million yuan. Meanwhile, police seized more than 50 desktops and laptops, over 80 mobile phones, more than 40 bank cards, 12 USB security tokens (U-shields), and nine accounting ledgers. The case is still under further investigation.
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