China has launched a lawsuit filed by OTC cryptotrader Zhao Dong. He is known in the crypto community as an investor in Binance, Bitfinex, and Tether. As part of the case, he faces a prison term of up to three years.
Court of the Hangzhou has launched a lawsuit against Zhao Dong for "facilitating illegal activity on the network." This wording in China means that a citizen transfers information technology to third parties, realizing that they are committing a crime on the network. If the judge recognizes Dong's guilt, then in addition to imprisonment, he also faces a fine.
A year ago, Zhao was arrested as part of an investigation by the police of China and charged with deliberately assisting mobsters to launder the funds they received. Earlier, more than 100 people were adjudged in China for “concealing the illegal activity” due to money laundering by scammers using cryptocurrencies. However, under this article, they were threatened with not 3, but as much as 7 years in prison.
According to OKGroup, the basis for the lawsuit against Zhao Dong was the laundering of 50B yuan (about $7B). The trader and the defendants were accused of helping the cybercriminals by performing the services of counterparties as part of their transactions. Such "schemes" are used to make money by providing their own bank accounts and accounts of payment systems in order to mix fiat and "launder" it. For money laundering, the team used more than 70,000 accounts, actively carrying out operations using them for five months. With the growing popularity of the crypto market, Dong and accomplices began using USDT to make the mixing process more efficient and safer in terms of potential law enforcement scrutiny.
When Dong was detained in July 2020, the cryptocurrency community considered it a fake or someone's bad joke. Since he previously took an active part in the life of the market since 2010, managing large OTC exchanges in China and was a shareholder in such cryptoexchanges as Binance and Bitfinex. Also, he was the founder of the p2p platform RenrenBit, created for the purpose of lending in the equivalent of cryptocurrencies. However, the lawsuit turned out to be real, as well as the term that now threatens the once-promising trader.