Core Insights - The rise of stablecoins and decentralization concepts in the capital market has led to their misuse by criminals for illegal cross-border currency exchange, with Tether (USDT) becoming a central tool for these activities [1][2] - Recent cases reveal that the amounts involved in these illegal exchanges often exceed hundreds of millions, with some transactions reaching over 10 billion [1][2] Group 1: Mechanism of Illegal Currency Exchange - The operation of illegal currency exchange involves domestic clients transferring RMB to designated accounts while foreign groups simultaneously transfer foreign currency to the clients' overseas accounts, effectively splitting the transaction to evade regulation [3][4] - Criminal organizations have established a professional division of labor, with individuals managing shell companies and handling significant daily transaction volumes, facilitating efficient operations of illegal exchange networks [4] Group 2: Profit Models and Incentives - The core profit channels for these illegal exchange operations include transaction fees, profit from price differences in virtual currency trades, and a dual arbitrage strategy of buying low and selling high [1][6] - For instance, a case from Chongqing highlighted that a trader could earn approximately 0.15 RMB per USDT through price discrepancies, leading to substantial profits as transaction volumes increased [6][7] Group 3: Legal and Regulatory Implications - The involvement of virtual currencies in illegal exchanges poses significant risks, as these transactions operate outside regulatory frameworks, making it difficult for participants to seek legal recourse in case of disputes or fraud [7] - The activities contribute to illegal cross-border capital flows, posing a threat to national financial security [7]