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Chinese and Indian authorities have taken major steps to stop rising crypto scams involving Tether’s USDT, a stablecoin tied to the U.S. dollar. These scams often use fake online relationships, false mining schemes, and shady online platforms to trick people into giving up their money.
In late July 2025, police in China’s Hunan province broke up a scam operation involving three suspects. The group used romance scams to connect with victims overseas. Once trust was built, they tricked victims into clicking harmful links, which then emptied their Trust Wallet accounts filled with USDT. The group used 30 different mobile phones and foreign SIM cards to stay hidden.
Meanwhile, in India, five people were arrested for running a similar fraud using Telegram-based platforms. Among them was a 29-year-old woman known as the “Crypto Queen.” This group promised victims high returns from simple online tasks. Victims were then led to invest more money, which was converted into USDT and laundered through fake bank accounts known as “mule accounts.”
In a separate incident in Delhi, a 56-year-old doctor lost over $115,000 after being targeted in a romance scam. The scammers told the doctor that tax issues had frozen his crypto assets. Believing the lie, he continued sending money until he realized it was a fraud.
These events highlight a serious issue: both India and China have gaps in how they regulate cryptocurrencies. In India, although the Supreme Court removed the ban on crypto banking in 2020, there is still no clear licensing system for platforms. Real-time checks are also missing, making it easy for fraudsters to trick people.
The Indian government has tried to tackle the issue by introducing a 30% tax and 1% TDS (tax deducted at source) on crypto trades under Section 115BBH. But without strong enforcement, these measures don’t fully prevent misuse.
On the Chinese side, enforcement varies by region, and there’s no unified crypto policy. The recent bust in Hunan shows that local police can act quickly, but without a broader national strategy, many scammers still find ways to operate.
Experts say stablecoins like USDT are popular among criminals because they keep a stable price and can move quickly between accounts. Even after these arrests, USDT stayed at $1.00, though its 24-hour trading volume dropped by 1.86% by July 30, 2025.
The Coincu research team pointed out that the recent actions are helpful but won’t solve everything. Because these cases are handled locally and often not made public, it’s hard to judge the full impact. Also, many scams remain hidden until it’s too late.
Globally, similar problems are growing. In South Korea, over 15,000 people were victims of a $225 million crypto scam involving fake investments. This shows that countries around the world are facing similar challenges when it comes to crypto fraud.
As these scams increase, so does the pressure on governments to create better rules. Right now, many scammers use platforms like Telegram, fake websites, and even real-looking documents to trick people. They take advantage of the fact that most people don’t fully understand how crypto works.
What’s also worrying is how these fraudsters mix social tricks—like fake relationships—with technical tools, like mobile apps and unregulated exchanges. That makes it harder for average users to protect themselves.
The recent arrests in both China and India are steps in the right direction. But experts believe more needs to be done. Governments must develop clear crypto rules that work across different regions and include real-time checks on transactions.
Public awareness is also key. People need to be educated about the risks of investing in crypto through unknown sources or making payments based on online promises.
In conclusion, while the crackdown on USDT scams in China and India is a good sign, it also reveals just how widespread and complex these scams have become. Without stronger global cooperation and better regulation, scammers will likely continue finding new ways to exploit the crypto system.
