China cracks down on underground bank responsible for $64B of illicit FX transactions


Police in east China’s Zhejiang Province have broken the country’s largest underground bank, which has carried out illegal Forex transactions of RMB 410 billion (US$64 billion), according to a report by Xinhua news agency, referring to sources at the Ministry of Public Security.

The crackdown comes as a part of an investigation that started in September 2014. The police probe has led to a total of 100 suspects from eight gangs having been detained. Police say the gangs were united by a ringleader, Zhao, who operated dozens of shell companies in Hong Kong.

The companies that formed the underground bank were involved in illegal foreign exchange transactions and money laundering.

In December 2014,more than 3,000 bank accounts were frozen. It took almost a year for police to check more than 1.3 million suspicious transactions.

One gang boss, Yang, told Xinhua that the customers of the underground bank tried to avoid China’s strict supervision on foreign exchange trading.

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China cracks down on underground bank responsible for $64B of illicit FX transactions

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