China police believed to detain crypto OTC traders amid money laundering crackdown. Chinese law enforcement are targeting cryptocurrency trading, Zhao Dong, a prominent Chinese crypto OTC trader and the co-founder of crypto lending platform RenrenBit.
Zhao is held up by police in the city of Hangzhou. A rumor that Zhao was taken away first emerged on WeChat on Thursday, after a screen capture describing his detention began circulating within the local community and was later reported by local news outlets.
In a statement made on Weibo, a representative of RenrenBit shared that one unnamed OTC trading desk in Beijing had its whole team taken away by police late last month. It does not appear that any of the OTC traders were outright arrested.
RenrenBit said Zhao, who has invested in the OTC team but was not involved in day-to-day trades, returned from Japan to China early June and is now “actively” assisting local police with investigations into anti-fraud and anti-money laundering.
An anonymous person with direct knowledge of the issue, shared that Zhao is currently being held by police. The source added that this is systematic effort, not an isolated incident. The issue also sparked some fear among other OTC desks in China, the person said.
Cryptocurrencies, especially the dollar-pegged USDT, have been a popular method for Ponzi schemes or fraud organizers to launder money in China. This would then contaminate the fiat money and cryptocurrencies circulating in the Chinese OTC market.
[image: Vincent Chan]