Chinese police have cracked down on a $1.9 billion underground banking scheme involving the stablecoin Tether (USDT). Operating primarily in Chengdu, the operations facilitated the exchange of foreign currencies using USDT. Authorities arrested 193 suspects across 26 provinces, dismantling operations in Fujian and Hunan and freezing assets worth $20 million. Despite China's ban on crypto activities, traders continue to utilise digital assets for illicit purposes. A report by Kyros Ventures shows Chinese investors rank second globally in stablecoin holdings, indicating persistent evasion of regulatory restrictions. China's crackdown on crypto, including mining and exchanges, has prompted shifts to decentralised platforms and increased usage of VPNs among traders.