- Illegal network used USDT to evade regulations.
- Yang and Xu led the operation.
- No immediate market impact observed.
The Shanghai court has cracked down on an illegal stablecoin network managed by Yang and Xu. The operation involved 6.5 billion yuan in transactions using USDT over the last three years.
Yang and Xu orchestrated the network through shell companies, operating without institutional backing. Their activities highlight the risks of unapproved stablecoin use and evade regulatory oversight through separate transactions. Gao Yongfeng, Senior Partner at Shanghai Jinli Law Firm, noted, “This illegal exchange mechanism splits what should be a single, regulated forex transaction into two separate operations, thereby evading regulatory oversight.” source
The crackdown has caused unease among potential illegitimate operators, yet the USDT market remains steady without disrupting wider liquidity flows. The case underscores China’s tightening control over crypto activities.
The enforcement actions may influence regulatory policies, prompting compliance reviews across the industry. This reflects China’s ongoing clampdown on illegal crypto exchanges and stablecoin misuse.
No alterations in major cryptocurrency prices like BTC or ETH have been reported. Importantly, the USDT market cap remains unaffected despite the legal proceedings against the illicit network.
This situation could influence regulatory approaches to stablecoin regulation worldwide. Historical data shows similar crackdowns can alter regional regulatory landscapes, enhancing compliance protocols and regulatory transparency.
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