Home of the Chinese Tether laundry, Bhutan enjoys the latest Bitcoin boost: Asia Express

Asia's weekly news roundup reviews the industry's most important developments.

Garbage laundry service

A Chinese court in the northwestern province of Gansu has sentenced ten individuals involved in the Tether (USDT) counterfeiting service.

The defendants were sentenced to between 10 months and a year in prison, and officials said they received more than $168,000 (1.2 million yuan) in illegal profits, state-run online news outlet The Paper reported.

The scheme, run by a man identified as Shane, operates a USDT trading studio that siphons off crypto profits tied to online gambling and telecom scams.

It is said that Shen and his accomplices knew that the cryptocurrency came from illegal activities. They have profited by converting illegal crypto to fiat currency at high exchange rates.

According to court documents cited by the paper, Shane set up the operation in early 2022 and recruited several associates to help run illegal cryptocurrency transactions. Together, they rented property and equipped them with the necessary equipment – computers, software and equipment – to run the clothing business.

Then they set up a trading group on the popular messaging service Telegram and made over-the-counter (OTC) deals in USDT – at a discount from criminals involved in telecom fraud, who bought USDT and sold it to other customers at a high price.

The court found that the group earned more than $124,000 (880,000 yuan) from these activities. But their fake business is estimated to have facilitated the theft of more than $834,000 (5.9 million yuan) from victims.

The case is a reminder of China's continued strong stance on crypto.

Despite recent rumors suggesting that China may lift its ban on crypto trading in the fourth quarter of 2024, Chinese authorities have yet to show any signs of possibility.

In August, the Supreme People's Court – the highest court in China – amended the country's money laundering law to include virtual assets for the first time.

In July, Beijing held the Third Plenary Session, a meeting of the Communist Party's top officials. The meeting focused renewed attention on the global promotion of the central bank's digital currency, which it sees as the only legal digital tender. All other digital currencies, including Bitcoin, remain illegal for payments.

Bhutan's Bitcoin investment has grown by $70 million since Arkham's announcement.

The landlocked government of Bhutan may be pleased to see its bitcoin holdings reach more than $830 million after a small rally in Bitcoin prices this week.

Bhutan was identified on September 16 by Arkham Intelligence as the fourth state owner of Bitcoin.

When first reported, the South Asian nation's Bitcoin holdings were estimated at approximately $758 million.

Bhutanese investment has also increased as the price of Bitcoin rose above $63,000 on September 19.

As of September 19, Arkham data shows that the royal government of Bhutan holds 13,058 BTC worth about $832.7 million.

The government also owns $1.6 million in Ether.

Despite being a small landlocked country of less than 800,000 people in the eastern Himalayas, Bhutan's bitcoin holdings are estimated to be more than double that of El Salvador, a country often spotlighted for its Bitcoin adoption.

While El Salvador's bitcoin strategy has attracted global attention, Bhutan's stash has quietly grown through mining operations by Druck Holdings and Investments. Arkham states that many governments with significant Bitcoin wallets will find them through law enforcement asset seizures.

Cambodia slams US senator over crypto fraud links

Cambodia's government has rolled back US sanctions targeting senator and businessman Lee Yong Phat, who are accused of facilitating forced labor in cryptocurrency-related online scams.

Cambodia denounced the move as politically motivated, calling it an “unfair decision” and citing Lee's role in job creation and infrastructure development.

A US Treasury announcement on September 12 followed reports of serious human rights abuses at the Li-O-Smach resort, where human trafficking workers were forced to carry out crypto scams.

The Treasury He cited a report from the Federal Bureau of Investigation that found a 53% increase in cryptocurrency investment fraud in 2023, many of which were linked to human traffickers operating digital fraud schemes.

U.S. authorities say Lee's businesses were part of a network that lured individuals into deceiving and dangerous working conditions through fake job offers.

The Treasury also cited the US State Department's annual Trafficking in Persons report, which shed light on human trafficking and exploitation, focusing on Cambodia's widespread human rights abuses.

However, Cambodia's Ministry of Foreign Affairs has criticized the US-based human trafficking report as showing an incomplete picture of the country's efforts to combat human trafficking. They highlighted Cambodia's continued cooperation with international partners, including the US, to tackle forced labor and transnational crypto-crime.

Last week, a magazine in Asia Express reported on the rise of “pork killing” scams, where fraudsters lure victims into fake romances in order to gain their trust and eventually steal their cryptos, promoting investments in ridiculous crypto projects or asking for crypto payment transfers.

Southeast Asia is becoming a hub for pork smuggling syndicates, where even kidnapped and trafficked teenagers are forced to work as scam operators.

Cambodia has emerged as a country of interest, partly because of Huione Pay, a Cambodian foreign exchange business owned by the Huione Group conglomerate, which has emerged as a crypto-laundering hot zone.

Binance and WazirX clash goes official.

Crypto exchange Binance has received claims from WazirX CEO Nishal Shetty and his legal team, alleging that Binance controls most of WazirX's parent company Zeta's profits, limiting their ability to compensate users affected by a massive cyber attack in July.

In a town hall released on September 16, WazirX said it was sold out in 2019.

Although Shetty did not mention Binance by name, it was clear that the opposite side of the debate was the world's largest exchange.

In addition, Binance, the party behind the dispute, was mentioned in a slide presented by the legal team of the City Hall.

“Your platform was hacked on July 18th. Any profits were being generated on your platform on July 17th, who will receive those profits? Was it you, Zetay or Binance?” asked one town hall attendee.

“Not forever,” replied Shetty.

Binance strongly denied these allegations, stating that it did not acquire or control WazirX in a firm response.

“The WazirX team and Nischal Shetty continue to mislead WazirX customers and the market regarding the relationship between WazirX and Binance. Binance did not own, control or operate WazirX at any time, including before, during and after the July 2024 attack,” Binance said in a blog post.

According to Binance, a contract was offered but was not completed due to Zettai not fulfilling its contractual obligations.

In the year On July 18, over $230 million was stolen from WazirX, an Indian cryptocurrency exchange, in the second largest cryptocurrency hack of 2024 so far.

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John Yun

Yohan Yun is a multimedia journalist who has been reporting on blockchain since 2017. He has contributed as an editor to crypto media outlet Forkast and covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.