Chinese courts have sentenced five operators of the Sifang payment platform to prison terms of three to six years in a case involving an online gambling payment network that processed more than 2.95 billion yuan, or about $428 million, through $USDT, bank cards and third-party payment accounts.

The Paper reported that the Intermediate People’s Court of Xilin Gol League in Inner Mongolia upheld Ma’s conviction for illegal business operations on June 26. The decision left in place Ma’s four-and-a-half-year prison sentence and a 3 million yuan fine.

Ma’s case was the final judgment in a series of prosecutions tied to Sifang, described as a fourth-party payment operation that provided payment channels to online gambling businesses. The court also ordered authorities to recover 2.95 million yuan in illegal income from Ma.

Court records cited by The Paper said Ma and four other defendants handled illegal payment processing between May 24, 2022, and Oct. 18, 2023. The network routed funds through 105 merchant accounts linked to 10 third-party payment companies.

According to the records, some defendants received commissions or rebates through $USDT wallets, while other payments were made through bank cards. Prosecutors classified the activity as unlicensed payment settlement services and charged the defendants with illegal business operations.

Zhu was sentenced to five years in prison and fined 800,000 yuan. Zhang received a six-year sentence and an 850,000 yuan fine. The remaining defendants received prison terms ranging from three to six years, The Paper reported.

Sifang connected gambling platforms with payment channels

According to the first judgment in the group of cases, Zhu, Zhang, Tang, Du and Ma started building the operation in May 2022 after learning that providing payment services to gambling platforms could generate substantial profits.

Court documents said the group commissioned 32 collection and payment platforms, rented servers outside China and contacted operators of overseas gambling websites. The systems they created connected those gambling businesses with merchant accounts at established third-party payment companies.

The Paper reported that Sifang functioned as a fourth-party, or aggregated, payment service rather than as a licensed payment provider. Such platforms combine payment interfaces from banks and third-party processors, enabling merchants to collect funds through multiple channels using a single system. In this case, that structure mattered because prosecutors treated the routing of gambling-related payments through merchant accounts, bank cards and $USDT wallets as unlicensed settlement activity rather than as ordinary merchant payment processing.

Investigators said Zhu and Zhang were responsible for managing payment routes, coordinating with third-party providers, handling complaints and arranging the distribution of profits. Ma introduced payment channels, provided merchant registration materials and assisted merchants in opening accounts with third-party payment companies.

According to the court findings, Ma also introduced intermediaries and helped address issues that emerged during merchant application reviews and fund transfers.

Prosecutors initially alleged that the group earned 42.85 million yuan by charging a 1.45% commission on merchant transfers connected to overseas gambling websites. However, the courts ultimately attributed much smaller final profit amounts to several of the defendants.

Judicial records showed that one wallet associated with Zhang received 4.146 million $USDT across 485 deposits between July 2022 and October 2023. The same records valued those deposits at about 26.95 million yuan.

Another wallet made 497 outgoing transfers totaling 4.097 million $USDT. Zhu, Zhang and Du also converted 1.905 million $USDT into cash through 11 offline transactions, which the court valued at approximately 12.38 million yuan.

For Ma, records obtained from the OKX application showed 152 transfers totaling 719,176.7 $USDT into a wallet he had provided. The court valued those tokens at about 4.67 million yuan and deducted 1.72 million yuan that had been returned by a co-defendant, leaving Ma with 2.95 million yuan in recognized illegal proceeds.

$USDT evidence raises questions under China’s legal framework

Investigators in Erenhot obtained wallet addresses from Tether and transaction details from OKX as part of the case, The Paper reported. Wang Xiaohua, an associate professor at East China University of Political Science and Law, told the publication that connecting traceable blockchain transfers to specific individuals remains difficult when tokens do not pass through an exchange with identifying records.

Ma’s lawyer argued that investigators had not proved how many payment accounts Ma handled and had not explained the purpose of more than 100 $USDT transfers. The Paper said it asked the Xilin Gol court for comment on questions involving evidence, valuation and cross-border data collection, but did not receive a response before publication.

The ruling comes amid calls from Chinese legal scholars and prosecutors for clearer rules governing 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 continuing problems under China’s current framework.

Prosecutors from Xiangtan’s Yuhu District and a Xiangtan University law professor argued that cryptocurrency’s anonymous, decentralized and cross-border characteristics have complicated investigations. They also cited inconsistencies between China’s revised Anti-Money Laundering Law and Article 191 of the country’s Criminal Law.

Those issues are central to cases like Sifang, where courts must evaluate blockchain records, exchange data, wallet control and token valuation while also determining how much income should be attributed to each defendant.

China’s Supreme People’s Procuratorate disclosed in June that authorities prosecuted more than 1,200 people for drug-related money laundering between January 2025 and May 2026. In one case, a court sentenced drug trafficker Li Mobo to death after authorities found that he had laundered more than $7 million through cryptocurrency. Officials stated, however, that the combined sentence covered multiple drug trafficking convictions and was not imposed for money laundering alone.