Exclusive: Suspected Nanning OTC trader arrested for allegedly using USDT to launder money for telecom fraud

Wu Blockchain learned that recently a Nanning OTC trader was suspected of assisting telecom fraud criminals in money laundering and was arrested by the police. This indirectly shows that the combination of USDT, cryptocurrency and telecom fraud in China is becoming closer, which may bring more card freezing risks to ordinary users. OTC traders also need to increase their screening efforts.

Information released by Guilin Internet Police Patrol and Diecai Police Station shows that Luo Mou carried out virtual currency transactions online by buying high and selling low, thereby providing a money laundering platform for criminals. Online traders must purchase Bitcoin and other items through USDT currency transactions, and Luo Mou is the "middleman" who sells USDT virtual currency to those who need it and finally exchanges it for cash. This kind of currency transaction does not require the use of real names and bank accounts, so criminals can avoid the monitoring of law enforcement personnel and commit crimes. At present, the suspect Luo Mou has been criminally detained by the public security organs in accordance with the law, and the case is under further investigation.

Several industry insiders told Wu Blockchain that according to the description in the article, Luo should be an OTC trader.

In early June, a "card freezing wave" caused panic in the cryptocurrency circle. Wu said that the core reason was that telecom fraud and Ponzi schemes were recently investigated by the police, especially the actions of Dongguan JC, which led to a large number of bank cards being frozen. The OTC USDT trading area was the hardest hit area for telecom fraud funds to be used for money laundering. This case in Guangxi once again proved this point.

The origin of the incident was that on May 11, the Diecai Branch received a report from Ms. Qin that she received a call on May 8 from a person claiming to be a staff member of the Tianjin Communications Bureau. The other party said that a telecom card handled by Ms. Qin was involved in spreading COVID-19 rumors and selling fake masks. Ms. Qin was later informed again that she was suspected of financial fraud. The other party also stated that the victim’s identity information was stolen and that all property under her name needed to be checked and frozen. Then, Ms. Qin was asked to transfer her deposits to a "safe account established by the public security agency." The victim lost a total of 480,000 yuan.

After receiving the alarm, the police detected and warned and dissuaded the people who were being defrauded, and the amount of dissuaded was as high as more than 6 million yuan. At the same time, it was found that the fraudsters had dozens of accounts involved in the case. After committing the telecommunications fraud crime, they all operated online through criminal dens set up in various places to transfer the stolen money, and divided the stolen money into transfers and overseas withdrawals through bank cards and major investment platforms. Through the account, one of the suspects who helped the network information crime, Luo, was tracked down and determined to be temporarily living in Nanning. On May 20, the police rushed to Nanning and arrested him.