A Chinese court sentenced five Sifang payment platform operators to three to six years in prison for the gambling network that processed more than 2.95 billion yuan (about $428 million) through USDT, bank cards and third-party payment accounts.
summation
- A Chinese court sentenced five Sifang operators to prison terms of three to six years.
- The network processed approximately $428 million through USDT, bank cards, and payment accounts.
- Investigators used Tether wallet data and OKX records to track cryptocurrency transactions.
The newspaper reported that the Inner Mongolia Siringol Federation Intermediate People’s Court found Jack Ma guilty of operating an illegal business on June 26 and sentenced him to four years and six months in prison and a fine of 3 million yuan.
Ma’s case is the final verdict for a group of prosecutors linked to Sifang, a fourth-party payment company that provides payment channels to online gambling businesses. The court also ordered authorities to recover 2.95 million yuan of illegal income from Mr. Ma.
Ma and four other defendants processed illegal payments between May 24, 2022 and October 18, 2023, according to court records cited by The Paper. The operation moved funds through 105 merchant accounts linked to 10 third-party payment companies.
Records show that some defendants received commissions or rebates through USDT wallets, while other payments were made through bank cards. Prosecutors regarded their work as unlicensed payment activity and indicted them on charges of illegal business.
Zhu was sentenced to five years in prison and a fine of 800,000 yuan, while Zhang was sentenced to six years in prison and a fine of 850,000 yuan. Other defendants received terms ranging from three to six years, The Paper reported.
Sifang connected gambling sites to payment channels.
According to the first verdict in the series, Zhu, Zhang, Tang, Du and Ma began building the business in May 2022 after realizing that payment services for gambling platforms could generate large profits.
According to court documents, the group commissioned 32 collection and payment platforms, leased servers outside China and contacted people operating overseas gambling websites. These systems linked gambling operations to merchant accounts held by existing third-party payment companies.
According to The Paper, Sifang operated as a fourth-party or integrated payment service rather than a licensed payment provider. These platforms combine payment interfaces provided by banks and third-party processors, allowing merchants to collect funds through multiple channels in one system.
Investigators said Zhu and Zhang managed payment channels, coordinated with third-party providers, handled complaints and arranged profit sharing. Ma introduced payment channels, provided seller registration materials, and helped sellers open accounts with third-party payment companies.
Ma also introduced intermediaries and dealt with problems that arose while merchant applications and fund transfers were being processed, according to the court ruling.
Prosecutors initially estimated that this group pocketed 42.85 million yuan by receiving a 1.45% remittance fee from affiliates linked to overseas gambling sites. However, the court found that the ultimate benefit amount for several defendants was much lower.
According to judicial records, one wallet associated with Zhang received 4.146 million USDT through 485 deposits between July 2022 and October 2023. According to the same records, the value of those deposits is approximately 26.95 million yuan.
Another wallet sent 4.097 million USDT through 497 transfers, and Zhu, Zhang, and Du also converted 19.05 million USDT into cash through 11 offline transactions. The court assessed the cash conversion value at approximately 12.38 million yuan.
In Ma’s case, records obtained from the OKX application show that 152 transfers totaling 719,176.7 USDT were made to the wallet he provided. The court valued the tokens at approximately 4.67 million yuan and deducted the 1.72 million yuan returned by the co-defendants, leaving Ma with 2.95 million yuan in admitted illegal proceeds.
USDT records test China’s rules of evidence.
Erenhot’s investigators obtained wallet addresses from Tether and transaction details from OKX while building the case, The Paper reported. Wang Xiaohua, an associate professor at East China University of Political Science and Law, told the publication that it is still difficult to link traceable blockchain transmissions to real people when the tokens do not pass through an exchange with an identification record.
Ma’s lawyers argued that investigators failed to determine how many payment accounts Ma processed or explain the purpose of transfers exceeding 100 USDT. The newspaper said it sought comment from the Xilin Gol court on issues of evidence, evaluation and cross-border data collection, but did not receive a response before publication.
The ruling follows calls from Chinese legal scholars and prosecutors for clearer rules on cryptocurrency-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 persistent problems under China’s current regime.
A prosecutor from Xiangtan’s Yuhu district and a law professor from Xiangtan University argued that the investigation is complicated by the anonymous, decentralized and cross-border features of cryptocurrencies. They also pointed out inconsistencies between China’s revised anti-money laundering law and Article 191 of the Criminal Code.
China’s Supreme People’s Procuratorate said in June that authorities had indicted more than 1,200 people on drug-related money laundering charges between January 2025 and May 2026. In one case, a court sentenced drug trafficker Li Mobo to death after discovering he had laundered more than $7 million through cryptocurrency. But officials made it clear that the combined sentences covered multiple drug trafficking convictions and were not imposed solely on money laundering.