Breakthrough in Combating Illicit Tobacco Operations
As of New Year’s Day in 2025, law enforcement in Liuzhou, Guangxi Province, China, achieved a significant breakthrough in the fight against illicit tobacco-related operations tied to virtual currencies. Authorities successfully dismantled a criminal organization that had been using “Tether (USDT)” for illegal tobacco transactions, highlighting a critical development in China’s ongoing battle against emerging covert tobacco crimes linked with digital currencies.
Investigation and Data Analysis
The operation gained momentum on September 28, 2024, at the Tobacco Joint Operations Data Center in Liuzhou, where a sophisticated virtual currency cigarette transaction monitoring system was tirelessly sifting through vast amounts of dark web data. An alert was triggered, signaling a suspicious virtual currency transaction on an illicit platform, prompting the Liuzhou Public Security Bureau to swiftly establish a dedicated team alongside relevant security agencies to delve deeper into the matter.
To navigate the complexities of the virtual environment, investigators employed advanced blockchain analytical techniques, analyzing an astonishing 2 billion transactions conducted in Tether on the Tron blockchain, alongside scrutinizing over 220 million wallet addresses. This data integration effort led to the creation of a comprehensive billion-level data repository, guiding the investigation with the aid of big data analytics.
Tracking Down the Criminal Network
Focusing on the identified wallet addresses, the task force tracked real-time transaction flows and amounts, unveiling unusual fund movements totaling over 30,000 Tether, equating to around RMB 217,000. Following extensive analysis, seven suspect wallets were detected, and key transaction identifiers linked to two overseas exchanges were identified. This pivotal information revealed the operations of the illegal network.
In an effort to overcome the challenges posed by the anonymity of digital currency transactions, investigators meticulously cleaned and organized the virtual currency exchange data, effectively linking anonymous wallet addresses to actual individuals. By November 30, 2024, the task force had traced the origins of the criminal syndicate, uncovering a roster of twelve individuals, including suspects Wu and Qin, who had established a sophisticated operation that combined online matching, virtual settlements, and logistics distribution into a comprehensive illicit tobacco trafficking scheme.
Conclusion: A Successful Operation
In a decisive police operation on January 1, 2025, authorities arrested all twelve suspects in Liuzhou, confiscating a staggering 84,400 illegal cigarettes and uncovering transactions involving 28,625 Tether. Confronted with the evidence, one suspect, Huang, expressed regret, admitting,
“I thought using virtual currency would shield me from detection, but I never anticipated being caught so quickly.”
This incident serves as a stark reminder of the evolving landscape of crime and law enforcement’s commitment to combating it in the digital age.
