Chinese and Indian authorities have intensified efforts to disrupt cryptocurrency-related scams involving Tether’s USDT, a stablecoin pegged to the U.S. dollar, with recent arrests highlighting vulnerabilities in digital finance ecosystems. On July 24, 2025, Hunan Youxian Public Security Bureau dismantled a USDT fraud operation involving three suspects who used romance scams and falsified “mining mechanisms” to steal from overseas victims. The perpetrators, operating through 30 mobile devices and foreign SIM cards, lured individuals into clicking malicious links, draining their Trust wallets of USDT [1]. Despite the scale of the operation, the broader crypto market showed minimal disruption, with USDT maintaining a stable price of $1.00 and a 1.86% decline in 24-hour trading volume as of July 30, 2025 [3].
In India, law enforcement arrested five individuals, including a 29-year-old dubbed “Crypto Queen,” for orchestrating a scheme that funneled stolen funds into USDT via unregulated Telegram-based platforms. The group, which operated without official licenses, exploited victims through promises of high returns on online tasks and recruited “mule” bank accounts to launder proceeds [2]. A parallel incident in Delhi saw a 56-year-old doctor lose $115,000 after falling for a romance scam that fabricated tax demands to justify frozen crypto assets [2]. These cases underscore India’s fragmented regulatory landscape, where a 2020 Supreme Court ruling overturned the Reserve Bank of India’s ban on banks serving crypto businesses, but licensing and real-time monitoring remain absent [2].
The lack of robust oversight has enabled criminals to exploit stablecoins like USDT for large-scale theft. Experts from the Coincu research team note that while the Hunan takedown had localized effects, the absence of official statements complicates assessing systemic risks [3]. Meanwhile, India’s tax authorities have intensified enforcement under Section 115BBH, imposing a 30% tax rate and 1% TDS on crypto transactions, yet enforcement gaps persist [2]. Globally, similar challenges are emerging, as evidenced by South Korea’s reported 15,000 victims in a $225 million crypto scam [4].
Authorities face mounting pressure to balance innovation with safeguards, as scams increasingly exploit both technological and social vulnerabilities. The Hunan and Delhi operations highlight the urgent need for structured frameworks to address unregulated digital finance, where trust and misinformation remain potent tools for fraudsters.
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[2] USDT Scam Operation Dismantled by Hunan Police,[https://coinmarketcap.com/community/articles/6889a90413fbdc7b20c0eb22/] [2] Delhi’s ‘Crypto Queen’ Arrested, [https://coinmarketcap.com/community/articles/688737303c1f324d51532df1/] [3] Tether USDt (USDT) Market Data, [https://coinmarketcap.com/community/articles/6889a90413fbdc7b20c0eb22/] [4] South Korea Crypto Scam, [https://www.instagram.com/reel/DMscD6yoRtO/]
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