Chinese courts have sentenced five Sifang payment platform operators to between three and six years in prison for a gambling network that processed more than 2.95 billion yuan, or about $428 million, through USDT, bank cards and third-party payment accounts.
Summary
- Chinese courts sentenced five Sifang workers to between three and six years.
- The network processed approximately $428 million in USDT, bank cards and payment accounts.
- Investigators used Tether wallet data and OKX records to track crypto transactions.
The newspaper reported that the Xilin Gol League People’s Court in Inner Mongolia upheld Ma’s conviction for illegal business on June 26, upholding his four-and-a-half-year prison sentence and a three million yuan fine.
Ma’s case was the latest in a series of prosecutions linked to Sifang, a third-party payment service that provided payment channels to online gambling businesses. The court also ordered the authorities to return 2.95 million yuan in illegal income from Ma.
Court records cited by the Paper showed that Ma and four other defendants processed illegal payments between May 24, 2022, and Oct. 18, 2023. The transaction transferred funds to 105 merchant accounts linked to 10 third-party payment companies.
Some defendants received commissions or rebates through USDT wallets, while other payments went through bank cards, according to the records. The prosecutors took their job as an unlicensed tollbooth and charged with operating an illegal business.
Zhu was sentenced to five years in prison and fined 800,000 yuan, while Zhang was sentenced to six years and fined 850,000 yuan. Some defendants received sentences ranging from three to six years, The Paper reported.
Sifang has connected gambling sites and payment channels
According to the first judgment in the series, Zhu, Zhang, Tang, Du and Ma started to build a business in May 2022 after learning that the payment services of gambling platforms can generate huge profits.
Court documents said the group controlled 32 collection and payment platforms, hosted servers outside China and contacted people using overseas gambling websites. Those systems link gambling businesses with merchant accounts held at third-party payment companies.
Sifang was operating as a third party, or integrated payment service instead of a licensed payment provider, according to The Paper. Such platforms include payment links provided by banks and third-party processors, allowing merchants to collect funds through several channels in one system.
Investigators said Zhu and Zhang managed the payment channels, connected with third-party suppliers, handled complaints and arranged the distribution of profits. Ma introduced payment channels, provided registration materials for merchants and helped merchants open accounts with third-party payment companies.
Ma also introduced intermediaries and dealt with problems that arose during the processing of vendor applications and transfers of funds, according to the court’s findings.
Prosecutors initially alleged that the group earned 42.85 million yuan by taking a 1.45% commission from merchant referrals linked to international gambling websites. However, the courts say that the amount is too small for the ultimate benefit of the few defendants.
Legal records showed that one fund associated with Zhang received 4.146 million USDT through 485 deposits between July 2022 and October 2023. The same records value those deposits at about 26.95 million yuan.
Another wallet sent 4.097 million USDT in 497 transfers, while Zhu, Zhang and Du also converted 1.905 million USDT to cash in 11 offline payments. The court valued the conversion at about 12.38 million yuan.
For Ma, records obtained from the OKX system showed 152 transfers totaling 719,176.7 USDT to the fund he provided. The court valued those tokens at about 4.67 million yuan and deducted 1.72 million yuan returned by another defendant, leaving Ma with 2.95 million yuan in known illegal proceeds.
USDT records examine China’s evidence laws
Erenhot investigators obtained wallet addresses from Tether and transaction details from OKX while building the case, the newspaper reported. Wang Xiaohua, an associate professor at East China University of Political Science and Law, told the publication that linking blockchain transfers traceable to real people remains difficult if tokens are not exchanged through identification records.
Ma’s lawyer argued that investigators had not found out how many payment accounts Ma managed or explained the purpose of the transfer of more than 100 USDT. The paper said it sought comment from the Xilin Gol court on evidence, measurement and cross-border data collection questions but did not respond before publication.
The decision follows calls from Chinese legal experts and prosecutors for clearer laws on crypto-related money laundering cases. As crypto.news previously reported, a July 13 article in the People’s Procuratorate Daily identified criminal liability, evidence collection and asset recovery as three ongoing problems under China’s current framework.
Prosecutors of Xiangtan’s Yuhu District and a law professor of Xiangtan University argued that the anonymous, decentralized and cross-border aspects of crypto have a difficult investigation. They also pointed to the conflict between China’s revised Anti-Money Laundering Law and Article 191 of its Criminal Law.
China’s Supreme People’s Procuratorate revealed in June that authorities prosecuted more than 1,200 people for drug-related money laundering between January 2025 and May 2026. In another case, a court sentenced drug trafficker Li Mobo to death after authorities found he had embezzled more than R7 million using secret currency, although the sentenced officials made it clear that the sentences did not include and the crime of drug trafficking. washing alone.
