The underground banking network of Chengdu is an illicit financial system that operates outside the formal banking sector, facilitating unauthorized and unregulated financial transactions. This network is often used to move large sums of money across borders without detection by authorities, bypassing traditional banking regulations and anti-money laundering laws. In Chengdu, these underground banks are known to provide services such as money laundering, tax evasion, and capital flight, catering to individuals and businesses seeking to hide or move funds discreetly. The network relies on a complex web of secretive financial intermediaries and unrecorded transactions, making it challenging for law enforcement to trace and combat.
The underground banking network began its operations in January 2021 and swiftly expanded across 26 provinces including Chengdu, demonstrating a highly organized scheme that exploited the pseudo-anonymity of cryptocurrencies. The Chinese police have apprehended 193 individuals linked to Chendgu network, illustrating the extensive reach and sophisticated nature of the operation.
Internationally, Chinese traders remain significant players in the stablecoin market. According to a report by Kyros Ventures, 33.3% of Chinese investors hold stablecoins, positioning them as one of the top stablecoin markets globally. This persistent involvement underscores the challenge for global regulators to monitor and manage decentralized financial activities.
h/t Emeraldlight
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