China Busts a USDT Gambling Ring Facilitating Payments Abroad

Chinese authorities have cracked down on an illegal gambling facilitator, arresting 76 suspects and cutting access to over 120 online gambling websites based outside of the country.

China Hunts Down an Illegal USDT Gambling Operation

China continues with its crackdown on unauthorized gambling operations. In the latest bust, the Public Security Bureau in Huizhou City in Guangdong province arrested 76 suspects involved in a payment fraud scheme which facilitated deposits and withdrawals from online gambling websites based outside China.

The payment system was described as a four-party payment processing operation, Chinese media said on Thursday. The operation also targeted other activities that are considered fraudulent under Chinese law.

Suspects reportedly used Tether (USDT) to process payments and provide players with an opportunity to participate in online gambling. According to authorities, the service was in operation for 15 months before it was snuffed out in June.

To function, the platform needed rank-and-file participants to create “runner” accounts. Some 3,000 people have been recruited for the purpose. Runners were asked to deposit sums of money on the platform and when they wanted to make deposits or withdrawals from a gambling website, they would use their account balances on the platform to purchase products that never arrived.

Rather, the money was subtracted from their balance and transferred to a gambling website where a player could play. As to the operation itself, it charged a small fee for the service. USDT has been chosen as a reliable cryptocurrency thanks to its anonymity, relatively stable price, and ease-of-use.

USDT is pegged to the price movements of the US dollar and has led to the minting of billions of dollars. In fact, USDT has followed US Treasury practices on this, increasing the supply to match the Treasury’s own new-money printing practices.

Stumping out Illegal Gambling in China

Meanwhile, China has been hunting down illegal gambling operators that operate outside the law in the country, which is effectively every gambling website. Most gambling websites available to Chinese players have to be inventive and use the services of intermediaries to process payments from within the country.

Earlier this year, China even created a platform that allowed citizens to report on fellow citizens whom they suspected of running or participating in gambling activities. Chinese media has warned that the creators of such services have become increasingly inventive in the way they re-creating the customer experience.

Specifically, payment processors would go to extreme lengths to convince regulators and leave a paper trail that a product purchase has happened where, in reality, the money had been used for gambling. Authorities have been tracking thousands of such transactions, official media reassured.

Some operations have even been sending empty boxes to recipients to give more authenticity to their gambling scheme. The crackdown on illegal gambling in China continues.  

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