Animoca Brands Expands Focus to Non-US Markets

In a major crackdown, the Chengdu Public Security Bureau announced on May 15 the dismantling of an extensive underground banking network, resulting in the arrest of 193 suspects across China in an operation that unveiled illegal businesses using the U.S. dollar stablecoin, Tether (USDT).Photo by DrawKit Illustrations on UnsplashUnauthorized foreign exchange settlements These activities involved illicit transactions amounting to approximately 13.8 billion yuan ($1.9 billion). The investigation began in November 2022 when authorities detected suspicious activities involving underground banks in Chengdu’s Longquanyi district. In response, a specialized task force was formed, integrating experts from various police departments, including economic investigation, cyber security and legal affairs. This team uncovered unauthorized foreign exchange settlements that bypassed national regulations. On June 1 of last year, acting on instructions received from the Ministry of Public Security, the task force conducted coordinated raids in several major cities, such as Shanghai and Shenzhen. These efforts led to the capture of key figures in the criminal syndicate, involving the arrest of 25 suspects. Law enforcement seized numerous bank cards, payment instructions and other digital payment instruments tied to the illegal operations during these raids. A broader investigation across 26 provinces has resulted in 193 suspects being arrested. Using USDT to evade regulationFurther investigations revealed that since January 2021, the syndicate exploited its import and export business to facilitate illegal activities. By using USDT as a medium, they bypassed official foreign exchange channels to service clients needing to transfer funds internationally. Moreover, these operations were intricately linked to other illicit activities, including financial fraud and smuggling. In a related development, on May 13, BeInCrypto reported that the Chinese government arrested six individuals responsible for illicit crypto transactions worth $295 million. These arrests highlight the challenges and risks associated with cryptocurrency in unregulated environments. Additionally, the Hong Kong police recently apprehended three men at a currency exchange shop following a deceptive transaction involving Tether’s USDT. The suspects allegedly showed a customer ceremonial "hell money" before deceitfully persuading him to transfer about $128,073 worth of USDT, only to refuse the agreed-upon cash exchange afterward.  According to the South China Morning Post (SCMP), hell banknotes are a form of ceremonial paper money burned as an offering to ancestors or deities in traditional Chinese culture. Late last year, USDT was used by a gang of gold smugglers in Nepal, who received $16 million in the Tether stablecoin in exchange for the precious metal. A joint investigation carried out by the authorities in Nepal and China led to the arrest of two Chinese and 13 Nepalese nationals in connection with the illicit activity. Over the course of the weekend, it emerged that two Chinese nationals had been charged by the authorities in the United States with money laundering through Bahamas-based Deltec Bank. Deltec acts as the primary banker for Tether, prompting longstanding Tether critics to suggest illicit activity relative to the stablecoin issuer’s dealings with the bank. This series of arrests and discoveries underscores the ongoing efforts of Chinese authorities to clamp down on illegal cryptocurrency activities. The activity also poses problems for Tether in its efforts to maintain compliance and stamp out illicit use in the face of ever-increasing regulatory scrutiny worldwide.

CMB International Securities, the brokerage and investment banking arm of China Merchants Bank (CMB), has acquired a virtual asset trading license and rolled out related trading services in Hong Kong.Photo by Traxer on UnsplashFirst Chinese bank-affiliated brokerage to add crypto servicesThe development is significant as it marks the entry of the first brokerage firm directly affiliated with a Chinese bank into the digital assets arena. It takes on further significance due to the importance of its parent company within financial services in Asia.Recent reports suggest that China Merchants Bank has assets under management (AUM) of RMB 15 trillion, equating to around $2.1 trillion. Headquartered in Shenzhen, the bank is China’s seventh largest in terms of AUM. Compared globally, an S&P Global Market Intelligence report published in 2024 positioned the bank in 25th place by measure of AUM. CMB International Securities disclosed that it started offering such services on Aug. 18 via a post on the Chinese social media platform WeChat. It explained that the launch followed the company’s acquisition of an upgrade to its existing trading license from Hong Kong’s Securities and Futures Commission (SFC) on July 11, authorizing the brokerage to offer virtual asset trading. 24/7 digital asset tradingThe company outlined that it has added virtual asset trading via its mobile application, offering qualified investors 24/7 digital asset trading. Following the launch, eligible investors can now trade Bitcoin (BTC), Ethereum (ETH) and the USDT stablecoin. These professional or eligible investors must open a CMB International Securities cash account before they can commence trading digital assets on the CMB platform. Given the ongoing ban on crypto trading activity within mainland China, CMB International has to ensure that its product offering doesn’t reach mainland residents. At the time of the company being awarded its virtual assets trading license last month, Hong Kong Web3 Association Co-Chair Joshua Chu spoke to that requirement. He stated:“By securing this licence, CMBI gains regulated access to Hong Kong’s dynamic crypto market, yet it must operate within strict boundaries that prevent direct mainland participation, reflecting the delicate balance of innovation and legal constraint.” ‘One country, two systems’“One country, two systems” is a constitutional principle of the People’s Republic of China that enabled the reunification of Hong Kong with China back in 1997. Many believe that while Beijing continues to impose a ban on crypto and hasn’t been vocal in its support of Hong Kong’s embrace of the crypto sector, there is an implied support nonetheless of Hong Kong’s development as a crypto hub.Hong Kong’s separate system allows China to let it develop as a proving ground for virtual assets. That tacit support has encouraged companies like Beijing-headquartered Tiger Brokers to pursue virtual asset trading licensing within the Chinese autonomous territory. Similarly, Victory Securities, a Hong Kong firm with a significant presence within the mainland Chinese market, has also pursued digital asset-related licensing in Hong Kong. This isn’t CMB International’s only crypto-related venture. Earlier this month, the company partnered with Singaporean digital asset exchange DigiFT in launching the Hong Kong-Singapore Mutual Recognition Fund. The development marked the first money market fund to be hosted on the Solana blockchain. 

Accused of one of the world's largest cryptocurrency scams, Andreas Szakacs, a Swedish national who became a Turkish citizen under the name Emre Avcı, was detained in Istanbul. The alleged international fraud scheme, led by Szakacs, began in 2019 under the guise of OmegaPro, a company dealing in forex and cryptocurrency trading. OmegaPro claimed to generate significant profits for its investors through complex financial algorithms and high-risk leveraged trading. The company, registered in opaque jurisdictions like Saint Vincent and the Grenadines and headquartered in Dubai, promised returns as high as 300% within 16 months, attracting investors from across the globe. High-profile endorsements and lavish eventsTo bolster credibility, Szakacs and his partners, including well-known figures in the finance and crypto sectors like Dilawar Singh and Mike Sims, organized extravagant events. These included the OmegaPro Legends Cup, a football tournament featuring former stars like Ronaldinho, Kaka and Iker Casillas, who were branded as OmegaPro ambassadors. The company also sponsored car races and held opulent conferences in luxury hotels, where gifts and prizes were distributed to participants, further enticing new investors. OmegaPro's operations spanned multiple continents, with representatives in countries such as Colombia, Mexico, the UK and Nigeria. Over time, the company claimed to have attracted 1.5 million investors. However, in late 2022, as withdrawals were suddenly halted, suspicions grew. By July 2023, the company had shut down, leaving an estimated three million investors defrauded and $4 billion unaccounted for.Photo by Xiaoyi Huang on UnsplashAs OmegaPro collapsed, investors from around the world began filing complaints. In France alone, over 1,500 victims have initiated a class-action lawsuit. Similar legal actions have been reported in countries including Mexico, Congo and Myanmar. Despite multiple investigations, the whereabouts of Szakacs and his partners remained unknown—until recently. A tip-off leads to arrest in IstanbulThe breakthrough came on June 28, when an anonymous informant tipped off Turkish authorities about Szakacs' presence in a luxury villa in Istanbul's Acarkent neighborhood. Following an investigation, the Istanbul Gendarmerie identified 18 complainants connected to OmegaPro. On July 9, Szakacs was arrested in a raid on the villa, where authorities found 32 cold wallets containing cryptocurrencies, along with extensive documentation related to OmegaPro’s operations. During questioning, Szakacs denied all allegations, claiming that OmegaPro was a legitimate business that went bankrupt in late 2022, resulting in significant losses for him and his partners. He also refused to provide access to the cold wallets and the encrypted data on his devices. Despite his defense, Szakacs was charged with fraud using information systems and detained by the Beykoz Criminal Court of Peace on July 10. Ongoing legal battles and future implicationsAs the investigation continues, authorities are scrutinizing Szakacs' digital transactions, which reportedly involve $160 million in movements over a single month. His legal team argues that investors knowingly took on risks in the forex market, but the sheer scale of the losses—especially the $103 million claimed by a Dutch complainant representing 3,000 victims—has intensified the case. The outcome of this case could set a precedent for how international crypto-related fraud is handled, particularly in an era where digital currencies and high-risk investments are increasingly intertwined.