A court in Shanghai has sentenced five people to prison for operating an illegal foreign exchange network that used cryptocurrency to move more than $29 million out of China.
According to prosecutors, the group helped clients transfer over 200 million yuan (about $29.4 million) abroad over a three-year period by using crypto transactions to bypass China’s foreign exchange controls.
The five defendants received prison sentences ranging from two and a half years to six years. They were also ordered to pay fines between 300,000 yuan and 1.5 million yuan.
Authorities said the investigation began after regulators detected suspicious transactions linked to a company in July 2024. Prosecutors found that the company used cryptocurrency to help clients secretly move money overseas without official approval.
The network mainly served wealthy individuals seeking to send funds abroad for purposes such as property purchases, emigration, and overseas education. The group also relied on agents to recruit new clients and expand its operations.
Prosecutors said cryptocurrency played a key role in concealing the movement of funds. By using blockchain transactions, the group made it more difficult for authorities to track money flows and collect evidence.
One of the defendants, identified only by the surname Gao, reportedly managed domestic clients and helped process more than 170 million yuan (around $25 million) in illegal transactions before leaving the company and launching a separate currency exchange business.
China maintains strict limits on the amount of foreign currency individuals can buy or transfer overseas each year. The annual limit is set at the equivalent of $50,000 per person, and authorities have long targeted underground networks that attempt to bypass these restrictions.
Regulators said they investigated more than 400 foreign exchange-related violations during the first half of 2025 and worked with law enforcement agencies to crack down on more than 180 underground banking cases.
The Shanghai case highlights China’s continued efforts to combat illegal cross-border money transfers involving cryptocurrency. Although crypto trading and related financial services remain banned in mainland China, authorities say digital assets are increasingly being used to move funds across borders without approval.
Chinese regulators have also warned that cryptocurrencies and stablecoins can be used to disguise money flows and evade financial controls. As a result, enforcement efforts have increasingly focused on crypto-related money laundering, underground banking operations, and unauthorized foreign exchange activities.
The ruling is the latest example of China’s broader crackdown on crypto-linked financial crimes and signals that authorities will continue closely monitoring wallet activity, transaction records, and intermediary networks involved in cross-border fund transfers.
