Chinese police are investigating an over-the-counter (OTC) cryptocurrency trader for facilitating a deal that involved $73,500 of illicitly gained funds, industry news outlet 8BTC reported today.
According to the publication, the dealer helped undisclosed fraudsters to trade 500,000 Chinese yuan (roughly $73,500) for USDT stablecoins. The funds, which are reportedly part of an investment scam, were first deposited on crypto exchange OKEx. The exchange, authorities and the trader himself are “continuing to cooperate in the investigation,” the outlet added.
OTC trading is a way to facilitate a deal directly with an exchange or an OTC desk—without the trade appearing on the exchange’s order book. This method is often used to execute especially large transactions and avoid the subsequent price movement of an asset.
However, if an OTC trader facilitates a deal that involves illegal funds, he could also be deemed liable. To evade any charges, the merchant will have to prove that he had no idea that the funds were gotten via a scam.
China Central Bank 'Blacklists' Local Bitcoin OTC Merchants
The People’s Bank of China (PBoC), the nation’s central bank, is flagging accounts related to large cryptocurrency traders in its latest crackdown, according to local news outlet WuBlockchain. The move is part of a broader crackdown on money laundering in China. Earlier this year, the PBoC launched its drive to eradicate illegal earnings and partnered with the country’s local banks to share account information and transactional details to prevent the proliferation of unlawful funds, of which cr...
Criminal charges are not the only thing the trader could be facing. As Decrypt reported, the People’s Bank of China—the country’s central bank—has already created a blacklist of crypto OTC traders to combat such practices. If a dealer is added to this list, all of his bank cards will be suspended from non-OTC trading—a big problem for any trader.
