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A district court in China has sentenced 17 individuals for their role in laundering more than 13.3 billion RMB through USDT, underscoring Beijing’s ongoing crackdown on illicit crypto activity.
The Hanjiang District People’s Court in Fujian handed down prison sentences ranging from eight months to three years on September 5, 2025. Defendants including Yan, Zheng, and Lin were found guilty of running an underground foreign exchange network powered by Tether’s USDT stablecoin.
Massive underground network exposed According to court documents, the group used offshore channels and “U coins” to illegally swap renminbi into foreign currencies. Investigators said the defendants relied heavily on USDT’s liquidity and cross-border transferability to mask illicit financial flows.
The ruling illustrates China’s determination to curb crypto-linked financial crimes, even though the country maintains a long-standing ban on crypto trading and related businesses.
Impact on Tether and the crypto market Despite the scale of the laundering scheme, the case had little immediate effect on global crypto markets. USDT continues to trade at $1.00, supported by a $168.35 billion market cap and 4.4% dominance. Trading volume dipped by 8.25% to $98.39 billion over 24 hours, but market participants note the stablecoin’s demand remains firm.
Legal analysts suggest that while the convictions highlight China’s strict enforcement posture, they are unlikely to disrupt Bitcoin, Ethereum, or broader market sentiment. Instead, they may prompt exchanges handling large USDT volumes to strengthen compliance and monitoring measures.
A recurring challenge China’s action reflects a pattern of enforcement dating back to 2017, when regulators first began targeting underground banks that turned to stablecoins as laundering tools. While enforcement has intensified, the persistence of such cases shows the challenges of eliminating illicit exchange channels.
For regulators worldwide, the Fujian convictions may reinforce the need for stricter oversight of stablecoin transactions, even as markets remain largely unfazed.
