(Yicai Global) July 18 -- Chinese police have arrested 21 suspects in connection with a CNY380 million (USD53 million) money-laundering case in which the virtual currency USDT was used, China Central Television reported today.

The arrests were made following an in-depth investigation after police detected abnormal activity in April in the bank account of a resident in Jincheng in Shanxi province, indicating a high likelihood of money laundering, CCTV said. The case is still being pursued.

The criminal group had been money laundering since October 2021 by using over the counter USDT transactions, making illegal profits in the meantime, the police found. The group had settled funds of 54.8 million USDT in total, equivalent to about CNY380 million, the investigation showed.

The police also seized more than CNY200,000 (USD27,880) in cash and USDT worth over CNY1 million (USD139,400) at the scene of the arrest.

USDT, a cryptocurrency launched by Hong Kong-based Tether in 2014, is a stablecoin pegged to the US dollar. It has become criminals’ first choice for money laundering due to the convenient transactions and strong anonymity, the report said, citing a police officer handling the case.

To tackle the risk of illegal fundraising and money laundering, Chinese regulators banned virtual currency issuance and trading in the Chinese mainland in 2017.

Editor: Tom Litting