Shanghai crypto forex case sends five to prison over $29M transfers

A Shanghai court sentenced five people to prison over an illegal foreign exchange network that used crypto to move more than $29.4 million abroad.

A Shanghai court sentenced five Chinese individuals to prison terms ranging from two and a half years to six years in a crypto-linked foreign exchange case. According to a post by the Shanghai Jing’an District People’s Procuratorate, authorities arrested nine people in the case.

The five defendants also received fines ranging from 300,000 yuan, or about $44,150, to 1.5 million yuan, or about $220,780. Prosecutors said the group helped domestic clients transfer more than 200 million yuan, or about $29.4 million, abroad over three years.

Shanghai prosecutors say crypto helped hide transfers

The case began after China’s State Administration of Foreign Exchange found unusual transactions tied to a company in July 2024. Prosecutors said the company used crypto to help clients bypass China’s foreign exchange rules.

The group targeted wealthy clients who wanted overseas funds for property purchases, emigration or study abroad, according to prosecutors. It also expanded the business through regular agents who helped bring in clients for illegal cross-border transfers.

“In cross-border cases involving crypto assets like this, electronic evidence is central to securing a conviction and is also the easiest to lose,” prosecutors wrote in the post.

They said the group used the features of on-chain transfers to make fund flows harder to trace and collect as evidence.

One defendant surnamed Gao worked as the company’s domestic client manager, according to prosecutors. Gao helped process more than 170 million yuan, or about $25 million, in illegal foreign exchange transactions before leaving the company and starting a separate currency conversion business.

China keeps strict foreign exchange controls

China limits how much foreign currency individuals can buy or send abroad each year. The annual quota stands at the equivalent of $50,000 per person, a rule that has made underground transfer networks a long-running target for regulators.

The State Administration of Foreign Exchange said it investigated more than 400 foreign exchange-related illegal cases in the first half of 2025. SAFE also said it worked with law enforcement agencies to penalize more than 180 underground banking cases during the same period.

The Shanghai case shows how crypto can appear in foreign exchange cases even though mainland China bans crypto trading and related financial services. Authorities have continued to treat crypto-linked transfers as a risk when they help move funds across borders without approval.

China expands crypto-linked enforcement

As previously reported by crypto.news, China has placed virtual currency laundering, underground banking and cross-border fund transfers among its key anti-money laundering targets. The People’s Bank of China said criminals increasingly use virtual currencies and new technologies to hide money flows.

Chinese authorities had already called for tighter action against illegal foreign exchange activity involving stablecoins such as USDT. Regulators said fiat-backed digital tokens can act as a channel for yuan conversion into foreign currencies.

The Shanghai ruling adds another court case to that enforcement push. It also shows prosecutors are focusing on electronic records, wallet activity and agent networks when building crypto-linked foreign exchange cases.

The case is likely to remain relevant for crypto businesses and OTC brokers that deal with clients in mainland China. Local authorities continue to separate Hong Kong’s regulated digital asset market from mainland rules, where crypto trading and crypto-based financial activity remain tightly restricted.