Shanghai court sentences five to prison over $29 million crypto forex scheme

A Shanghai court has sentenced five Chinese individuals to up to six years in prison for facilitating more than $29.4 million in illegal cross-border foreign exchange transactions using crypto.

In a post published Monday, the Shanghai Jingan District People's Procuratorate wrote that the authorities have arrested nine individuals. Five defendants were sentenced to prison terms ranging from 2.5 years to six years, along with fines between 300,000 yuan ($44,150) and 1.5 million yuan ($220,780).

In July 2024, the State Administration of Foreign Exchange (SAFE) discovered unusual transactions tied to a company that helped domestic clients illegally transfer funds abroad using cryptocurrencies, moving more than 200 million yuan ($29.4 million) over three years.

The group targeted high-net-worth clients seeking to purchase overseas property, emigrate or study abroad, and expanded its illegal cross-border transaction services through a network of regular agents, prosecutors said.

Prosecutors added that the group leveraged the anonymity of onchain transactions to conceal the fund flows, making it more difficult for authorities to collect evidence.

"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. 

One individual surnamed Gao, who served as the company's domestic client manager, helped process over 170 million yuan ($25 million) in illicit foreign exchange transactions, according to the prosecutors. Gao later left the company and ran her own currency conversion business.

China has long enforced strict foreign exchange controls, capping the amount of yuan citizens can convert or remit at the equivalent of $50,000 per year. In the first half of 2025, SAFE said it investigated more than 400 foreign exchange-related illegal cases and cooperated with law enforcement agencies to penalize more than 180 underground banking cases.