Chinese courts have sentenced five operators of the Sifang payment platform to prison terms of three to six years in connection with 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.

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

Ma’s case was the final judgment in a series of prosecutions tied to Sifang, described in court records 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 showed that Ma and four other defendants processed illegal payments from May 24, 2022, to Oct. 18, 2023. The operation moved funds through 105 merchant accounts linked to 10 third-party payment companies.

Some defendants received commissions or rebates through USDT wallets, while other payments were routed through bank cards, according to the records. Prosecutors characterized 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 prison term and an 850,000 yuan fine. The other defendants received sentences ranging from three to six years, The Paper reported.

Sifang connected gambling websites with payment channels

According to the first judgment in the case series, Zhu, Zhang, Tang, Du and Ma began building the operation in May 2022 after learning that payment services for gambling platforms could generate significant 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 built connected gambling businesses with merchant accounts held at established third-party payment companies.

Sifang functioned as a fourth-party, or aggregated, payment service rather than as a licensed payment provider, according to The Paper. These platforms combine payment interfaces supplied by banks and third-party processors, allowing merchants to collect funds through multiple channels from a single system.

The case centered on that intermediary layer: the courts treated the aggregation of merchant accounts, bank-card routes, third-party payment channels and USDT transfers for gambling operators as an illegal payment settlement business rather than as isolated token transfers.

Investigators said Zhu and Zhang managed payment routes, coordinated with third-party providers, handled complaints and arranged profit distribution. Ma introduced payment channels, supplied merchant registration materials and helped merchants open accounts with third-party payment companies.

The court findings also said Ma introduced intermediaries and handled problems that arose while merchant applications and fund transfers were being processed.

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

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

Another wallet sent out 4.097 million USDT through 497 transfers. Zhu, Zhang and Du also converted 1.905 million USDT into cash through 11 offline transactions, which the court valued at roughly 12.38 million yuan.

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

USDT transaction records raise evidence questions

Investigators in Erenhot 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 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 established how many payment accounts Ma handled and had not explained the purpose of more than 100 USDT transfers. The Paper said it sought comment from the Xilin Gol court about the evidence, valuation and cross-border data collection questions, but received no response before publication.

Those disputes show why crypto-linked payment cases can turn on both blockchain records and off-chain evidence, including account registrations, exchange data, wallet attribution and the valuation method used by courts.

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 persistent problems under China’s current framework.

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

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 laundered more than $7 million through cryptocurrency. Officials said the combined sentence covered several drug trafficking convictions and was not imposed for money laundering alone.