LE Capture Group That Laundered $324.2 Million USDT in Taiwan

324.2 Million USDT Was Laundered in Taiwan
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In Taiwan, authorities successfully apprehended a 40-year-old individual known as Qui, who had concealed his identity under the guise of a water merchant. This arrest exposed a massive crypto money laundering operation valued at $324.2 million in Tether (USDT) and underscored the challenges associated with regulating cryptocurrency transactions. The case sheds light on the criminal exploitation of cryptocurrencies for illegal activities and the ongoing efforts to bring such activities under control.

Taiwanese police arrested one of the country’s largest crypto-related money laundering syndicates in Taichung, involving $324.2 million worth of USDT. In a statement, Taiwan police confirmed the arrest of an individual surnamed “Qui” and three other individuals.

Qui, a 40-year-old individual and leader, legally claimed to be a water merchant. However, he ran the largest money laundering scheme in Taiwan’s history. Criminals and victims of the fraudulent investment scheme transferred funds into shell and crypto exchange accounts.

Qui’s operation utilized a network of fake accounts as conduits for diverting illicit funds. The funds would eventually reach his possession. Once in possession, Qui imposed his cut: a 1% commission from every transaction, approximately $3.2 million.

In his efforts to launder the money, Qui converted victims’ funds into Tether (USDT) coins, effectively concealing the origins of the funds. Tether (USDT), a popular stablecoin, is at the centre of money laundering schemes. Since February 2022, Qui allegedly processed 324.2 million Tether (USDT) coins through his cryptocurrency wallet. 

DarkWeb Usage To Launder Money

Cryptocurrencies, despite their innovative use and value, have repeatedly been used for laundering money, illicit activities, and financial crimes. Converting illicit funds into cryptocurrencies has become the preferred laundering technique for cybercriminals.

Authorities worldwide have been struggling to come to terms with regulating cryptocurrency transactions. In particular, the swapping of cryptocurrencies across blockchain networks is increasingly popular.

Qui’s fraudulent investment scheme expanded across multiple Southeast Asian countries, including Malaysia, Hong Kong, and the Philippines. Taiwanese police uncovered 2,166,177 illegally obtained Tether coins with an estimated value of 70 million yuan.

Qui is reported to have made a profit by charging a 1% commission on each transaction involved in his money laundering operation. Furthermore, he frequently traveled to various Southeast Asian countries, including Malaysia and the Philippines, where authorities suspect he had connections with gambling and fraud syndicates. These connections and his extensive travels raised suspicions about his involvement in criminal activities beyond money laundering.

According to the report, criminals might turn to the Darknet for various purposes. They can use Darknet marketplaces to exchange their ill-gotten cryptocurrencies for other digital assets or traditional currencies, making it difficult for authorities to trace the transactions. Therefore, its possible that Qui may have moved more money than we know of.

Currently, there’s no information on whether Qui used Darknet markets/ fraud shops/ mixing services. The law enforcement is looking at how Qui communicated, and coordination with other criminal actors with anonymous services.

It’s important to note that the Darknet provides a level of anonymity that can make it challenging for law enforcement agencies to track and apprehend those involved in illegal cryptocurrency activities. Though Quo clearly couldn’t get away with it.

On June 13, police officials apprehended Qui after he landed in Taiwan from Taoyuan Airport. Following Qui’s arrest, Taiwanese authorities confirmed the further arrest of three other individuals. 

The group’s money laundering operation is a new record for the most illicit funds detected and seized by Taiwan’s Electronic Investigation Team. By international criminal standards, the bust is modest.

Capturing A Money-Laundering Genius

Taiwan’s Electronic Investigation Team (EIT) stumbled onto Qui’s Tether transactions while investigating another case. The case involved a criminal group that defrauded 19 individuals with a fraudulent digital asset investment scheme.

It’s unclear whether Qui was involved in the fraudulent investment scheme. However, blockchain analysts linked his USDT addresses to one of the local sources of the USDT funds, one of the 19 victims.

Prosecutors and investigators began to accumulate evidence linking Qui to his mastermind money laundering scheme. In October 2022, the EIT discovered fraudulent mobile software connected to Taishin Securities, a financial products firm based in Taiwan.

Taiwanese investigators began to follow a money trail, leading them straight to a 40-year-old believed to be a key player in Qui’s elaborate scheme. The breakthrough in the investigation led authorities to devolve into Qui’s day-to-day activities.

The discovery of pirated software connected to Taishin Securities raised authorities’ suspicions. Taiwanese police agents became weary of Qui’s actions, stumbling across a series of traveling journeys and criminal engagements. 

Qui’s frequent overseas travels, illegal gambling interests, meetings in undisclosed places, and links to fraudulent groups further raised suspicions about his criminal activities. As part of the investigation, police agents arrested Qui on June 13 while returning to Taiwan from Taoyuan airport.

Seized Vehicles From The Opperation

At the airport, police agents seized Qui’s cell phone, which was reported to contain a record of his criminal activities.

Agents later that evening raided his residence and Lamborghini URUS, a Lexus LM, three Apple watches with a value of 1 million yuan, laptops, credit cards, 210,000 yuan in cash, and drugs such as K-tamine.

Taiwan’s Electronic Investigative Team revealed that Qui’s crypto wallet processed 324.2 million Tether coins, with a converted value of 10.48 billion yuan. In addition, investigators linked a 25-year-old foreign affairs officer named “Liao”, a 30-year-old operator named “Chen”, and 31-year-old “Huang” as accomplices.

Crypto Money Launderer Arrested

After months of investigating and gathering information on Qui’s criminal activities, Taiwan’s prosecution team took action. On June 13, Taiwan’s police agents arrested Qui at Taichung International Airport. 

Police arrested several other individuals linked to the money laundering scheme. The suspects face a potential prison sentence of up to seven years and fines of up to 1 TWD million ($30,770) under Taiwan’s Money Laundering Control Act.

Police later released Qui on bail, along with three other suspects in custody. The three other suspects included a foreign affairs officer named Liao (25) and two others in the water-selling business, Huang (31) and Chen (30). All four suspects await a pending trial date.

The arrest further enhanced Taiwan’s tough stance on cryptocurrencies. However, its lawmakers presented the Virtual Asset Management Bill to a single-chambered parliament last week. The bill seeks to improve customer safeguards and ensure oversight of the industry.