What happened to the crazy money laundering of 135 million from gold to virtual currency?

Recently, the Taiyuan police started with a clue of a large-value gold transaction, conducted in-depth research and analysis, followed the clues, and concentrated their superior police force to crack down on a criminal gang that used gold transactions to provide "money laundering" services for telecom fraud criminal gangs. So far, the police have arrested 15 criminal suspects, involving more than 127 telecom network fraud cases across the country, with a total turnover of 135 million yuan.

All over the country, laundering 135 million yuan

It is reported that the criminal gang, headed by Deng, has been undertaking the "money laundering" business of overseas telecom fraud and online gambling funds since early February 2023. The gang is divided into a fund receiving group, a site scouting group, a card swiping group, a gold-carrying transfer group, a currency dealer group, and a stolen goods sales group. After Deng contacted the "money laundering" business of the overseas telecom fraud gang, he contacted the "card dealer" to find a "cannon" to receive the stolen money from overseas telecom fraud and online gambling; the site scouting group went to various gold shops to scout and find gold shops with a large amount of gold spot; the card swiping transfer group and the cannon swiped the card to buy gold together, and then chose a more hidden public place to hand over the gold to the gold-carrying group; the gold-carrying person transferred the gold to Shenzhen and then handed it over to the currency dealer; the currency dealer handed it over to the stolen goods sales personnel for sales, and converted the stolen goods sales funds into virtual currency and handed it over to Deng; finally, Deng transferred the virtual currency to the overseas telecom fraud gang. In order to evade the crackdown by the public security organs, Deng contacted the overseas online and domestic offline through a single line of overseas chat software, and used virtual currency for settlement. From March 4 to March 9 alone, the gang bought 27 kilograms of gold in Taiyuan City, worth more than 12 million yuan. At present, it has been verified that the gang was involved in 127 telecommunications fraud cases across the country and "laundered" 135 million yuan for overseas telecommunications fraud gangs.

Gold-virtual currency, a new mismatch model

In this case, we found that the criminal gang had a clear division of labor and a clear process, forming a complex criminal chain from scouting, swiping cards, to carrying gold, selling stolen goods, and exchanging virtual currency. We can see that the criminals bought gold, and the henchmen went to the gold shop to pick up the goods and delivered them to the designated location to hand over the stolen goods to the stolen goods dealers. At this time, the stolen goods dealers exchanged them for virtual currency through currency dealers. The purpose of this is to confuse the source of funds and eventually transfer the virtual currency overseas to complete the "laundering" process of illegally obtained funds from legal currency to virtual currency. "Gold + cross-regional trading + virtual currency" has become a new model of "mismatched transactions" money laundering crimes. It can be seen that virtual currency may become an important part of more "mismatched transactions".

Virtual currency, a breakthrough in the case

Since the "Card Cutting" operation, it has become increasingly difficult and costly for criminals to launder money through legal currency. Virtual currency is not only used in large quantities in illegal fund transfers, but it has also become a new normal for the entire criminal group to use virtual currency to pay wages. Therefore, in investigating such cases, the flow of virtual currency funds is the most important breakthrough. Zhongke Lianan provides some practical investigation ideas here:

1. This type of case starts with the flow of funds from bank cards. Tracing down will involve many first-level cards, second-level cards, and public accounts (gold shop sellers), etc. The key is to determine at which stage the suspect converted the funds involved in the case. Some special transactions may be signals of legal currency conversion into virtual currency, such as buying gold, recharging phone bills, withdrawing cash, etc. Often the emergence of such behavior indicates that the funds involved in the case may have been converted into virtual currency. At this time, the investigative thinking must be switched from tracking legal currency funds to tracking virtual currency funds, and find ways to obtain the "involved address" of the fund return.

2. After obtaining the "address involved in the case", conduct research and analysis on the target address through financial analysis, track the outflow of funds, further discover key clues to the case, quickly lock in the suspected address, and determine the whereabouts of the funds.

3. Lock the suspected address for verification, find relevant transaction information in the verification document, identify suspicious points through data analysis, continue to track the transaction flow, and further explore the relationship between the suspect and the currency trader.

4. Integrate a large amount of on-chain and off-chain transaction data to further analyze the matching degree of the suspect's funds, behaviors, equipment, information, etc., dig out the address situation, flow, transaction time, and peer data, and penetrate the identity of the actual controller of the anonymous address on the chain, so that the criminal entities can surface one by one.

Final Thoughts

In the investigation of virtual currency cases, penetrating the flow of funds is one of the most important links. As an important carrier of illegal funds, virtual currency is often difficult to crack by relying on traditional technical means. Through the Wuan Virtual Currency Crime Early Warning Tracking Platform, with virtual currency addresses as the entry point, and on-chain transaction traceability penetration as the core, based on its own address tag library, high-risk address library, and virtual currency fund models of various cases, it assists law enforcement agencies in finding an "address-suspect" crackdown path.