The recent incident involving the Bank of Huludao in China has uncovered a complex scheme of misappropriation and money laundering carried out by two former executives with the help of cryptocurrency.
The scandal, which involves the illegal transfer of 1.8 billion yuan (approximately $248 million), has exposed serious vulnerabilities within financial institutions.
According to a report by National Business Daily, the former executives, Li Yulin and Li Xiaodun, diverted funds intended for the resolution of non-performing debts. They exchanged these funds into foreign currency and directed them towards accounts of companies controlled by them in Hong Kong. These funds were then invested in cryptocurrency through platforms like WeChat or groups like “Longmen Inn”.
Later, these digital assets were sold abroad, and the proceeds were laundered back through U.S. dollar transactions to some Hong Kong bank accounts, using regulatory loopholes applicable to cryptocurrencies.
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The legal proceedings have already commenced, with one of the accomplices, Chen, receiving a sentence of over two years’ imprisonment and a fine for laundering a portion of the stolen funds.
