China’s Crackdown on Illegal Money Exchanges: 846 Arrested, $11 Billion in Transactions

China’s Ministry of Public Security (MPS) has conducted a nationwide operation against illegal money exchanges, resulting in the arrest of 846 individuals and the closure of 100 underground banks in 2023. Officials reported that these operations facilitated transactions worth RMB 80 billion (US$11 billion).

At a press briefing on 13 December, the MPS underscored the rising prevalence of illegal money exchanges, locally known as huanqiandang. These services often target gamblers by providing high-interest loans.

Post-Pandemic Growth
The surge in illegal exchanges coincides with the reopening of borders in January 2023. Macau, a prominent gambling hub, saw a significant increase in casino visitors after three years of COVID-19 restrictions. Government statistics show that 12,000 individuals were intercepted for illegal exchanges in 2023—a 239% increase from 2022 and 41.3% higher than 2019 levels.

Experts believe this trend stems from the collapse of junket operators, which previously served high-stakes gamblers. Gaming law specialist António Lobo Vilela noted that the industry suffered losses of up to $17 billion in 2019, describing the issue as “the elephant in the room.”

Impact on Society
Illegal money exchanges are linked to other criminal activities, including theft, money laundering, and illegal immigration. Peng Peng, executive director of the Guangdong Society of Reform, highlighted the importance of stricter regulations to “protect China’s financial security, combat corruption, and curb illegal capital outflows.”

The crackdown follows recent legislative changes in Macau. In October, the Legislative Assembly passed laws criminalizing unlicensed currency exchanges. Offenders now face penalties of up to five years in prison and potential bans from casinos for up to 10 years.