Panshi Underground Bank Busted: Over 2 Billion Yuan in Transactions

Police in Panshi City of the Jilin Province have successfully cracked down on a large-scale underground bank operation involving virtual currency, with the total transaction amount exceeding 2.14 billion yuan (approximately $317 million USD).

The operation, which involved six suspects, facilitated illegal currency exchange between the Chinese yuan (RMB) and the South Korean won (KRW) by exploiting the anonymity and decentralized nature of virtual currencies.

According to authorities, the investigation began after the Panshi City Public Security Bureau’s Economic Investigation Brigade discovered suspicious activity linked to two individuals, Jin Moudong and Shen Mou. The investigation revealed a high volume of daily transactions, numerous customers, and patterns consistent with underground banking.

Following a comprehensive investigation, police apprehended Jin Moudong, Shen Mou, and other suspects. Authorities also seized a significant number of bank cards and related criminal tools.

The investigation uncovered that the group conducted illegal foreign exchange transactions through various methods, including using domestic accounts for fund transfers, over-the-counter (OTC) virtual currency trading, and Korean won settlements. These activities catered to clients such as Korean purchasing agents, cross-border e-commerce businesses, and import/export companies seeking to exchange RMB and KRW.

The remaining suspects, Chen Mouguang, Luo Moutao, He Mouda, and Zheng Mouyu, were apprehended through further investigation and evidence collection. This case highlights the growing challenge of illegal financial activities facilitated by virtual currencies. It also demonstrates the effectiveness of law enforcement agencies in China in combating such operations.