China's Ministry of Public Security shuts down 100 black-market banks, 846 individuals arrested

During a press briefing, on December 13, China's ministry officials announced that during the past year, its Ministry of Public Security has shut down 100 black-market banks so far this year and arrested 846 people in a crackdown on illegal money exchanges.

China's police have conducted five operations in a campaign the Ministry of Public Security launched in May to crack down on "money changing" in the Macao Special Administrative Region, an official of the ministry said, as reported by the China Daily.

Chen Shiqu, deputy head of the MPS criminal investigation department, said they have dismantled more than 100 "underground banks" and discovered more than 80 billion yuan ($11 billion) of capital flow involved in these cases, at a news conference held by the ministry in Beijing.

The police have also dismantled 263 organizations suspected of engaging in crimes deriving from "money changing," such as illegal business operations, illegal border-crossing, fraud, and false imprisonment, Chen said.

As per a report in Macau Business, such operations have increased since the end of the Covid-19 pandemic. Government figures show that police intercepted almost 12,000 people involved in illegal money exchanges last year, up 239% over 2022 and 41.3% over 2019.

Gaming law expert António Lobo Vilela called the surge "the elephant in the room that nobody wants to see. This growth is definitely linked to the void created by the disappearance of junkets, whose activity was worth something like $17 billion in 2019."

These shady operations aren’t new, added lawyer José Abecasis. People are always “attempting to circumvent China’s restrictions on capital flows out of the country”, he said. But the activity flourishes in Macau, where gaming “is the main economic driver”.

In October, the Macau Legislative Assembly (AL) passed legislation making it a crime to run an unlicensed currency exchange. The amended Law on Combatting Gambling Crimes includes prison terms of up to five years for offenders. Individuals convicted of such crimes could be banned from entering city casinos for up to a decade.