Chinese Fraud Ring Laundered Over $6M in USDT from 66,800 Indian Victims: Report

A sophisticated cross-border scam operation led by Chinese nationals has resulted in prison sentences after defrauding tens of thousands of Indian citizens and laundering millions of dollars through the Tether (USDT) stablecoin. The scheme, which operated under the guise of investment opportunities, was launched in May 2023 by a man identified only by his surname, He. He established an office in Shandong Province and recruited a team to build what authorities described as a professionally organized criminal syndicate.

The fraud targeted over 66,000 victims in India, luring them through promotional messages that promised monthly returns of 8% to 15% on modest investments of around 1,000 Indian rupees (approximately $12) through a fake platform called SENEE. Once enough funds had been deposited—often exceeding the promised returns—the scammers would abruptly shut down the site or convert the funds into fake equity shares to lock users out of accessing their money.

Authorities revealed that the stolen funds, totaling about $6.2 million, were funneled through third-party services and converted into USDT before being cashed out into Chinese yuan or U.S. dollars, typically with a 15% processing cut. The specific platforms used for laundering and withdrawal were not disclosed in the court report.

One member of the group, surnamed Li, impersonated a successful Indian investor online, portraying herself as a wealthy woman who had achieved financial success through the same fraudulent platform. This role was part of a broader psychological strategy to build credibility and attract more victims.

The group forged documents, created convincing websites, and deployed overseas servers to mask their true operations, adding further layers to their deception. Chinese authorities ultimately classified the group as a highly organized criminal network.

All nine individuals involved received prison sentences ranging from five to nearly fifteen years, along with monetary fines. The case underscores growing concerns about the use of crypto assets like USDT in cross-border financial crimes and highlights the challenges regulators face in monitoring digital assets used in illicit schemes.