Shanghai court jails five over $29.4m crypto forex scheme

A Shanghai court sentenced five people to prison, imposing terms from 2.5 to six years, after finding they used cryptocurrencies to facilitate more than 200 million yuan in illegal cross-border foreign exchange transfers over a three-year period. The court also fined the defendants between 300,000 and 1.5 million yuan.

Authorities arrested nine people in total. The case began after the State Administration of Foreign Exchange flagged unusual transactions in July 2024 linked to a company that helped domestic clients move funds abroad using crypto. SAFE reported the transfers exceeded 200 million yuan over three years.

Prosecutors wrote that the group provided currency conversion and transfer services to high-net-worth clients seeking to buy property overseas, emigrate or study abroad. The operation expanded through a network of regular agents who arranged transactions and routed funds out of the country using cryptocurrencies to mask origin and destination.

Investigators traced on-chain activity and mapped agent networks to build the case. Prosecutors wrote: “In cross-border cases involving crypto assets like this, electronic evidence is central to securing a conviction and is also the easiest to lose.” They added that the relative anonymity of on-chain transactions complicated evidence collection.

One defendant, identified by the surname Gao, served as the company’s domestic client manager and handled more than 170 million yuan in transfers. Prosecutors stated Gao later left the firm and set up a separate currency conversion business that authorities allege continued similar activity.

China caps most residents at converting or remitting the equivalent of $50,000 per year. SAFE said that in the first half of 2025 it investigated more than 400 foreign exchange-related illegal cases and worked with law enforcement to penalize over 180 underground banking operations.