Shanghai Court Addresses 6.5 Billion Yuan Stablecoin Case
- Lyla Velez
- July 20, 2025
- Policy
- 0 Comments
Key Takeaways:
- Main event, leadership changes, market impact, financial shifts, or expert insights.
- Shanghai court tackles illegal stablecoin network.
- 6.5 billion yuan foreign exchange scheme sentenced.
Yang and Xu faced sentencing in Shanghai for orchestrating a 6.5 billion yuan USDT-based illegal foreign exchange network through multiple shell companies.
Shanghai’s court ruling highlights continued blockchain-based financial threats and the need for stringent regulatory actions.
The Shanghai court decision involved Yang and Xu, who managed a large-scale USDT-centric network exploiting domestic shell companies. It operated within forbidden cryptocurrency activities, circumventing China’s regulatory prohibitions. The scheme processed significant illegal funds.
Operatives including Yang and Xu engaged in extensive fund management, handling daily cash flow through shell companies. This strategic maneuver allowed for cross-border transfers, effectively bypassing legal regulations and enhancing the importance of stablecoins in illegal markets.
This illegal exchange mechanism splits what should be a single, regulated forex transaction into two separate operations, thereby evading regulatory oversight. — Gao Yongfeng, Senior Partner, Shanghai Jinli Law Firm
This incident reveals limited direct impacts on token liquidity or blockchain activity, yet signifies persistent threats from illicit cryptocurrency practices. Tether (USDT) remains central despite China’s stringent bans, reinforcing its role in controversial exchanges.
Financial repercussions show no widespread asset freezings, but underline the growing focus on illegal exchanges. The case emphasizes the significance of compliance in digital finance to prevent similar unlawful operations, showcasing a proactive judicial stance.
Potential outcomes may involve heightened regulatory frameworks and technological adjustments within China’s borders to discourage illegal activities. Historical trends suggest this may redirect similar operations globally, necessitating continuous monitoring and robust financial regulations.
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