Ben Zhou, Bybit’s CEO, said residents of mainland China can access the crypto exchange with a VPN and bypass restrictions from China’s government while stressing that it will not accept the Yuan national currency.

The company blocks IP addresses from mainland China but began allowing overseas Chinese users to sign up for the exchange back in June. As reported by the South China Morning Post, Zhou stated that Bybit wouldn’t trade yuan but noted that mainland residents can use a VPN. He claimed the risks of allowing mainland Chinese residents to trade on their platform were “acceptable.”

Zhou additionally stated, “What the Chinese government dislikes the most about crypto is that it can facilitate capital outflow, so we won’t touch this red line.” China currently bans cryptocurrency trading, but Hong Kong allows it through licensed crypto exchanges.

Zhou also claimed that Bybit is planning to reapply for that Hong Kong license at the start of 2025 and intends to find a new compliance officer. This, he said, wouldn’t do much in terms of bringing in business from Hong Kong but rather act as a “confidence booster.”

Bybit’s VPN stance contrasts Coinbase

Coinbase recently received social media backlash for its tougher stance on VPNs after a user claimed that using a VPN and sending $25,000 in USDC locked their account. 

Coinbase’s product designer said, “Attackers always use VPNs, so our risk models take that as a negative sign even if you’re legitimately using your own account.”

When asked to comment on their VPN stance, Coinbase told Protos, “VPNs are a valuable tool for privacy, and simply using one won’t result in your account being flagged.” 

Read more: Polymarket bans French users but still can’t stop VPNs

However, it conceded VPNs can “trigger additional security reviews” when combined with “unusual activity—like a login from a new, unrecognized device.”

“This is a common practice across financial institutions to help prevent account takeover (ATO) attacks,” Coinbase said, and it recommended that users utilize a Passkey or a Physical Security Key for 2-factor authentication instead.

Bybit is currently the second largest crypto exchange in terms of 24-hour volume, according to Coingecko. Bybit is beaten only by Binance and remains larger than Coinbase.

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Telecoms giant AT&T has suffered a serious network breach by China-linked hackers, revealed by the Wall Street Journal (WSJ) just days after a $24 million case of cryptocurrency theft was reopened against the firm.

On Saturday, WSJ reported that US broadband providers Verizon, AT&T, and Lumen Technologies were among those found to have been targeted by Salt Typhoon — a highly sophisticated group believed to be sponsored by the Chinese state.

The months-long breach appears to have extended to wiretap systems, meaning that hackers may have gained access to sensitive information used by the US government for court-authorized wiretap requests. It remains unclear if foreign intelligence systems were also exposed.

Known among security experts as FamousSparrow and GhostEmperor, Salt Typhoon has been targeting hotels, government organizations, and telecoms firms since 2019. The group appears to mainly gather intelligence and steal data, rather than disrupt systems.

Read more: Russian hackers are using deepfake porn sites to steal crypto

Microsoft is reportedly investigating the breach. A spokesperson for the Chinese Embassy in Washington told WSJ that “China firmly opposes and combats cyberattacks and cyber theft in all forms.”

AT&T faces crypto theft case amid Salt Typhoon hack

While the far-reaching effects of the hack remain unclear, AT&T must also deal with a seven-year-old case of cryptocurrency theft that was unanimously reopened by an appeals court on Sunday, shining an extra spotlight on the responsibility of telecoms providers to protect customer data.

Crypto investor Michael Terpin is seeking a total of $45 million in damages, interest, and legal fees from AT&T after an employee was bribed into copying Terpin’s SIM card, allowing a 15-year-old hacker dubbed ‘Baby Al Capone’ to circumvent two-factor authentication and steal $24 million in cryptocurrency.

Though originally filing 16 charges against AT&T, only three have stuck — those claiming that AT&T broke a responsibility to protect Terpin’s SIM card information under Section 222 of the Federal Communications Act, referred to as customer proprietary network information (CPNI).

Read more: OKX SIM-swap leads to discovery of 2FA security flaw

“Adopting AT&T’s constrained view of CPNI would lead to absurd consequences,” the three-judge panel of the Ninth Circuit Court of Appeals wrote following its decision.

The high-profile nature of Terpin’s crypto theft case against AT&T, coupled with what appears to be a major security breach by Chinese state-sponsored hackers, has placed extra pressure on telecoms providers to safeguard customer data, and could set a legal precedent.

The case Terpin v. AT&T will now be remanded to the US District Court in Los Angeles for trial.

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Images shared by Craig Wright to his X (formerly Twitter) account appear to back up suggestions by the UK High Court that he could be in China.

On Tuesday, Wright posted pictures depicting a green valley and a bridge in the middle of a gorge. Describing the scene as “absolutely magnificent,” he claimed that the pictures were of an outing with his wife but didn’t reveal any more details. 

However, using Google’s reverse image search, it soon becomes obvious that the image is a photograph of the Tiger Leaping Gorge located on the Jinsha River in the Yunnan province of China.

Wright’s whereabouts have been a mystery since the conclusion of his UK court battle with the Crypto Open Patent Alliance (COPA).

As a result of this case, the High Court approved two injunctions against Wright and referred him to the Crown Prosecution Service to determine if he should be charged with perjury. His assets were also frozen to prevent him from evading court costs.

The elusive Aussie is currently attempting to appeal against podcaster Peter McCormack and COPA and according to the UK Civil Appeal case tracker, he submitted a third appeal on Monday relating to a May 20 court judgment involving COPA. 

During the appeal proceedings, the High Court noted that Wright could be traveling across the UTC +7 time zone which would line up with a potential China trip.

Read more: Craig Wright posts video from bare closet as he dodges payments

It’s worth noting, however, that today’s photos shared by Wright do not confirm his whereabouts. Indeed, he may have posted the images from elsewhere to disguise his real location.

All we can say with any degree of certainty is that he’s been kayaking and has filmed himself inside a closet.

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Justin Sun, founder of the TRON blockchain, numerous stablecoins, owner of Poloniex, and adviser to HTX, has been celebrating a recent Chinese court victory against Chongqing Business Media Group. However, the question is, will the win benefit him outside of the Mainland? The odds are that it absolutely will not.

According to a Chongqing court, Chongqing Business Media Group claimed that Sun was under investigation by the FBI and was suspected of insider trading. The court, however, found these claims to be “entirely unsubstantiated,” handing Sun victory on the grounds of defamation.

Many of the claims originated in a Verge article from March of 2022 and since its publication, none have been retracted.

Protos has previously reported on Sun’s false claims of diplomatic immunity and purported fixation on no moderation policies at BitTorrent.

Read more: Scoop: Justin Sun shot down BitTorrent moderation despite porn concerns

However, Sun can’t expect to sue and win cases against media companies located outside of China, mostly due to the fact that rules and regulations are much harsher and less flexible in the country.

As opposed to freer democracies with few successful defamation and libel cases, like the US, China puts the burden of proof on the media companies or individual reporters, with Article 51 of the Chinese constitution stating, “When exercising their freedoms and rights, citizens of the People’s Republic of China shall not undermine the interests of the state, society or collectives, or infringe upon the lawful freedoms and rights of other citizens.”

But Reporters Without Borders reports that China is nearly dead last (ranking 172 out of 180 countries) when it comes to press freedoms — with more than 100 journalists currently sitting behind bars.

In this context, the fact that Chongqing Business Media Group only had to issue an apology and pay a ¥500 fine ($69) isn’t so bad.

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The United States has announced an indictment against alleged money launderers based out of California who supposedly moved money for the Sinaloa Cartel via money mules, large quantities of cash, cryptocurrency purchases, and collaboration with ‘Chinese underground money exchanges.’

The Department of Justice (DoJ) alleges that this operation moved over $50 million in proceeds from the sale of cocaine, methamphetamine, and fentanyl.

A total of 24 defendants were charged as part of the investigation, dubbed ‘Operation Fortune Runner’ by authorities.

The money laundering operation was supposedly led by Edgar Joel Martinez-Reyes, who helped the Sinaloa Cartel strike a deal with the ‘brokers’ who would help facilitate the scheme.

It relied on a variety of methods to try to clean the drug trade proceeds, including the aforementioned crypto, precious metals and gems, and bank accounts set up by a variety of different co-conspirators.

Additionally, a significant portion of the funds were transferred to ‘brokers’ in China who facilitate illicit transactions outside of the relatively locked-down financial system in the country. There is significant demand for US dollars in China, and these brokers can facilitate conversion into renminbi without funds actually leaving either country.

Read more: Another Chinese money laundering scheme tied to Deltec and Tether

Dollars from the cartels are effectively sold to individuals and businesses in China who want those dollars. The funds that are then in China can be used to purchase precursor chemicals and other materials for drug synthesis and trade.

Relying on brokers who operate across borders like this helps reduce the risk of seizure and detection for these money laundering networks.

The indictment charges the defendants with aiding and abetting the distribution of controlled substances and money laundering offenses. 

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Two major Russian companies are using tether (USDT) and other cryptocurrencies to settle cross-border transactions in China as sanctions tighten, Bloomberg reports.

Executives from two top commodities trading firms producing metal in Russia told Bloomberg, on the condition of anonymity, that USDT is used in some of these transactions when dealing with mostly Chinese clients and suppliers.

Sanctions imposed on Russia following the Ukraine war have made it harder for commodities firms, such as those trading steel and timber, to receive payments. In April 2024 the London Metal Exchange and Chicago Mercantile Exchange were banned from accepting metal exports from Russia following UK and US sanctions.  

CEO of stablecoin infrastructure firm Reslov Labs, Ivan Kozlov, told Bloomberg, “In countries that are facing dollar liquidity issues and capital controls, cross-border settlements through cryptocurrencies and, specifically, dollar-linked stablecoins, are a relatively common practice, and not only in commodities.”

Read more: Another Chinese money laundering scheme tied to Deltec and Tether

Venezuela’s state oil company is also reportedly planning to up its use of crypto following sanctions from the US which kick in today. The firm had already slowly introduced USDT as a means to sell its oil, but the sanctions have reportedly speeded up the transition. 

Sanctioned crypto exchange Garantex is also the subject of a probe from the UK and US over the alleged use of $20 billion worth of USDT to dodge sanctions. A smuggler reportedly used the Russian-based exchange to purchase guns and ammo for the Russian military with USDT.

Garantex is also reported to share ties with a convicted gang member, a violent debt collection agency, and a state-backed oil company in Russia.

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Users of social media platforms like X and Instagram are accustomed to seeing crypto millionaires posting snapshots of their extravagant lifestyles. However, one nation’s millionaires are notably absent from the gaudy feed of crypto influencers: China.

In an attempt to enforce communist culture on mainland residents, the country’s internet regulator recently outlawed extravagant displays of wealth on social media. China’s Cyberspace Administration attracted attention to the rule by deleting a number of popular celebrities’ social media accounts. These included the 4.3 million-follower account of ‘China’s Kim Kardashian’ Wang Hongquanxing, which now shows an inaccessibility notice for ‘violation of self-discipline.’

“Once materialism starts spreading, it can have a bad influence on teenagers,” wrote state-controlled Beijing News about the crackdown. ”Hence this trend of luxury on the internet needs to be stopped.”

According to state-controlled publication Global Times, China’s version of TikTok, Douyin, has deleted over 4,700 wealth-boasting posts this month while the country’s version of Instagram, Xiaohongshu, deleted over 380 accounts.

Read more: China wants all metaverse users tagged and monitored like its citizens

Censored crypto millionaires in China

It’s difficult to imagine social media life as a crypto millionaire in China. Many crypto leaders adopt principles from the book 48 Laws of Power in order to attract attention to their tokens and projects and, according to the cult classic, charismatic leadership involves adorning oneself in jewelry, claiming one’s wealth is self-made, and asking followers to make sacrifices to attain success.

The quintessential status symbol of crypto wealth is, of course, a Lamborghini, with the cheapest used models starting at around $84,000. New models far exceed $200,000.

Across the globe, crypto millionaires have flaunted their ‘Lambos,’ Rolex watches, and designer outfits in crypto lifestyle videos since 2018.

Without access to social media and a prohibition on flaunting jewelry, designer clothing, or other ‘wealth show-offs, it’s unsurprising that most famous Chinese crypto leaders reside outside of mainland China and its Great Firewall.

• Binance’s Changpeng Zhao was born in China but spent most of his career abroad. He failed at staying humble on social media, assuring his fans that he was “really not that rich” because his net worth was less than $74 billion.
• Tron’s Justin Sun was born in China and had no reservations about posting extravagant opulence once he moved abroad. For example, he bought a rocketship ticket to space and a dinner with Warren Buffett.
• Himalaya Coin’s Guo Wengui, born in China, posted music videos from his $28-million luxury yacht after leaving the mainland.

Read more: A career timeline of Justin Sun, crypto’s most annoying over-marketer

Bought bitcoin below $10 but keeping it cool online

Crypto millionaires who maintain residential ties to mainland China are careful to temper their social media posts. Bobby Lee, co-founder of BTC China (now BTCC), still spends time behind the Great Firewall and keeps a modest social media presence, despite buying bitcoin since 2011 when it was below $10. 

Similarly, Yi He, the mother of Zhao’s child, remained in China while managing billions of Binance’s assets yet kept a modest profile on social media.

It’s difficult to get a true sense of the crypto wealth in China. Historically, Chinese investors have dominated the bitcoin mining industry and many were founding investors in crypto offerings that have returned six- and seven-figure percentage returns since their ICOs.

However, due to its Cyberspace Administration’s measures against ostentatious online displays online, only local residents truly understand the scope of crypto wealth inside China.

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Daren Li and Yicheng Zhang, two Chinese nationals, have been charged with utilizing tether and crypto-friendly bank Deltec to commit money laundering and wire fraud amounting to $73 million, according to an announcement on Friday by the Department of Justice (DoJ).

According to an affidavit, the pair, who were arrested in Los Angeles and Atlanta in April, worked with pig butchering and scam operations to move assets through “money couriers, financial transactions with no legitimate commercial purpose, and shell accounts.”

Specifically, Li and Zhang used a shell company called CMD Export and Import to transfer cash to crypto-friendly Bahamas-based Deltec Bank and Trust. It was then converted to USDT before being sent to Binance.US or Binance and distributed to money mules as necessary.

Li and Zhang gained citizenship of St. Kitts and Nevis (a small Caribbean Island that partially relies on citizenship by investment for its GDP). As verified by previous Protos reporting, crypto billionaire Justin Sun has St. Kitts and Nevis citizenship that he uses to incorporate in Hong Kong.

Read more: Executive texts claim Deltec moved customer funds from FTX to Alameda

While it’s stated in the DoJ press release that a wallet involved had received $341 million in virtual assets, it’s unclear if that’s an exchange hot wallet, a mixing service, or a wallet for the scam itself.

While many of the addresses associated with the scam have been seized or otherwise frozen, many remain active and operational. Protos will update this article if anything else is divulged.

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Police in China have announced the dismantling of a large underground banking gang accused of facilitating illegal transactions with almost $2 billion worth of tether (USDT).

Sichuan and Chongqing authorities said on Tuesday that 193 suspects across 26 Chinese provinces have been arrested as a result of the operation. 

According to local media, the gang allegedly used USDT to evade China’s foreign exchange regulations and provide a means for criminals to send their funds overseas, transacting 13.8 billion yuan ($1.9 billion).

Read more: How Triad-linked gang used crypto and casinos to launder $10B

Two ‘dens’ in Fujian and Hunan belonging to the gang were reportedly destroyed by authorities in 2023 and 149 million yuan ($20.6 million) of funds linked to the gang were frozen as part of the case. 

The gang’s illegal foreign exchange reportedly committed “financial fraud, job-related crimes, obstruction of drug management, smuggling of goods prohibited by the state…. obstruction of credit card management, defrauding export tax refunds and other criminal activities.”

USDT has also been used to pay gold smugglers in Nepal shifting 33kg of the precious metal into the country before returning to Tibet with sacks of cash, musk, and medicinal caterpillar fungus called yarsagumba.

Additionally, the United Nations claims that USDT is at the heart of a ‘parallel banking system’ created by organized crime in Southeast Asia. It said in a report, “Online gambling platforms, and especially those that are operating illegally, have emerged as among the most popular vehicles for cryptocurrency-based money launderers, particularly for those using Tether or USDT on the TRON25 blockchain.”

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A fake digital currency wallet scam that mimics e-CNY, the Central Bank digital currency (CBDC) of China, is being shared across the country’s app stores, according to the Chinese Ministry of Industry and Information Technology. 

The Chinese government warned social media users of a fake variation of the ‘Digital Yuan Test Version’ being listed on app stores. 

The fake wallet reportedly uses ‘dividends’ to manipulate users into sharing the app while also directing them to ‘uncommon social tools’ capable of seizing user funds. 

The app copies the e-CNY app’s logo, color scheme, and user interface but differs in its package name and version number. The government’s statement didn’t disclose exactly which app store the scam wallet is being listed on.

Authorities reportedly warned users to be wary of fake apps that rely on patriotism and use get-rich-quick messaging to lure users. It also highlighted the risks of scanning QR codes, visiting untrustworthy websites, and schemes promising high returns without losses.

Read more: Single Chinese ‘pig-butchering’ operation made $100M in USDT, report

China’s CBDC is still undergoing trials. Chinese banks tested cross-border transactions last year while a new pilot is encouraging citizens traveling between Singapore and China to use the CBDC for ‘tourism spending.’

It works by downloading the e-CNY app and linking your bank account to allow spending. The wallet has reportedly been issued 260 million times and Chinese yuan worth tens of billions of dollars has been transacted. 

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