Shanghai Court Sentences Five in $29M Crypto Forex Scheme

TLDR

• A Shanghai court sentenced five people over a $29.4M crypto forex scheme.
• Prosecutors said the group helped Chinese clients move funds overseas.
• The defendants received prison terms of up to six years and financial fines.
• One suspect allegedly processed over $25M in illicit forex transactions.
• Prosecutors said on-chain evidence was central to the crypto forex case.

A Shanghai court has sentenced five Chinese individuals to prison for helping clients move more than $29.4 million abroad through illegal foreign exchange transactions using cryptocurrency.

The Shanghai Jingan District People’s Procuratorate said authorities arrested nine people in the case. Five defendants received prison terms ranging from two and a half years to six years, along with fines between 300,000 yuan and 1.5 million yuan.

Prosecutors said the group used crypto assets to help domestic clients bypass China’s foreign exchange rules. The case adds to China’s wider enforcement campaign against underground banking and unauthorized cross-border money transfers.

Shanghai Court Issues Prison Sentences

The case began after China’s State Administration of Foreign Exchange found unusual transactions in July 2024. SAFE linked the activity to a company that allegedly helped Chinese clients send funds overseas through crypto.

Prosecutors said the company moved more than 200 million yuan, or about $29.4 million, across three years. The clients included wealthy individuals seeking overseas property purchases, emigration services, or foreign study payments.

The court sentenced five defendants after reviewing their roles in the foreign exchange scheme. The prison terms ranged from 2.5 years to six years, while fines ranged from about $44,150 to $220,780.

The identities of all defendants, the specific cryptocurrencies used, and the blockchain networks involved were not fully disclosed in the public statement.

Crypto Used to Bypass Forex Controls

China keeps strict controls on foreign exchange. Citizens can generally convert or remit only the equivalent of $50,000 per year under official limits.

Prosecutors said the group used cryptocurrency to help clients move money across borders outside approved channels. The structure allegedly allowed domestic yuan funds to be converted into crypto and later settled abroad.

One defendant, surnamed Gao, worked as a domestic client manager for the company. Prosecutors said Gao helped process more than 170 million yuan, or about $25 million, in illegal foreign exchange transactions.

Gao later left the company and started a separate currency conversion business, according to prosecutors. Authorities said the wider network used regular agents to expand its client base.

Prosecutors Cite On-Chain Evidence Risks

Prosecutors said the group used the perceived anonymity of on-chain transactions to hide fund flows. They said this made evidence collection harder for investigators.

The statement shows how Chinese authorities are treating blockchain records as important evidence in financial crime cases. It also shows that prosecutors are focusing on transaction tracing when crypto is used in cross-border transfer schemes.

The case was not about simple crypto ownership. Authorities targeted the use of digital assets in what they described as unauthorized foreign exchange activity.

China Maintains Strict Crypto Enforcement

China banned commercial crypto trading and related business activity in 2021. The country has also cracked down on mining, offshore exchange access, underground banking, and stablecoin-linked transfer networks.

Some Chinese courts have described Bitcoin and other digital assets as virtual property in civil disputes. However, that view does not allow commercial crypto trading or unlicensed foreign exchange activity.

SAFE said it investigated more than 400 foreign exchange-related illegal cases in the first half of 2025. It also worked with law enforcement agencies to penalize more than 180 underground banking cases.

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