In a joint statement with the State Administration of Foreign Exchange, the prosecutor’s office urged local authorities to implement stricter measures to thwart the use of Tether stablecoins in cross-border currency transactions.
The departments stressed that the use of USDT remains unlawful due to the comprehensive cryptocurrency ban in China. Consequently, any “fraudulent purchase of foreign currency, illicit foreign exchange transactions, and other unlawful and criminal activities associated with currency” will be suppressed and penalized.
Surprisingly, it’s not just the act of exchanging foreign currencies that is considered illegal; any activities related to it, including providing technical support for such platforms and even promoting relevant services, are also prohibited.
Of note, the document cites the case of Zhao Dong, a Chinese over-the-counter (OTC) trader who employed USDT. He was sentenced to seven years in prison for exchanging Arab dirhams for USDT and subsequently selling those stablecoins for yuan.