Chinese authorities have taken action against a massive underground banking scheme, involving over $2.2 billion, that exploited foreign virtual currency trading platforms to circumvent national capital controls. The operation involved purchasing virtual currencies and then selling them through overseas platforms to acquire the needed foreign currency. Chinese laws restrict nationals from exchanging over $50,000 in foreign currencies annually without a permit, and bypassing these controls is considered money laundering. The operation reportedly moved funds across thousands of bank accounts in 17 provinces. This crackdown aligns with China's stringent stance on cryptocurrencies and its efforts to control capital flight, reinforcing the country's strict foreign exchange regulations imposed in 2016.
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