The latest bust is another salvo in China’s war on capital flight — which some believe is the real reason behind the country’s continued ban on cryptocurrencies.
Chinese authorities reportedly cracked down on a $2.2 billion underground banking operation that allegedly used foreign “virtual currency trading platforms” to help its clients bypass the country's capital controls.
On Dec. 24, news was shared on Chinese social media that reported that Chinese foreign exchange police discovered an underground bank using crypto to bypass forex restrictions.
“Underground banks purchase virtual currencies and then sell the virtual currencies through overseas trading platforms to obtain the foreign currency they need,” explained Xu Xiao, the inspector from the Qingdao Branch of the State Administration of Foreign Exchange.
