BlockBeats News, April 29. According to China News Service Guangxi News, at the dawn of New Year's Day 2025, the "1•01" virtual currency tobacco-related crime in Liuzhou, Guangxi, China was cracked down on, and a criminal gang that had long been using the virtual currency "Tether (USDT)" for illicit tobacco-related transactions was completely eliminated. This breakthrough marks a new phase in Guangxi's tobacco monopoly front line's fight against novel covert tobacco-related crimes and serves as a significant case in combating virtual currency illicit tobacco-related transactions.

On September 28, 2024, the monitor screen at the Tobacco Joint Operations Data Center in Liuzhou flickered with blue light, while the virtual currency cigarette transaction trend awareness system scanned billions of data pieces from the dark web around the clock. Suddenly, an alert showed that a virtual currency transaction information was detected on an illegal website, drawing the attention of the investigators.

Subsequently, the Liuzhou Public Security Bureau immediately formed a task force in conjunction with relevant public security departments to further investigate the case. To break through the "fog," the task force utilized blockchain smart node resolution technology to fully analyze 2 billion "Tether" transactions on the Tron chain and 220 million wallet addresses, integrating data from multiple sources, establishing a multi-dimensional, multi-source billion-level data lake, and using big data to guide the case investigation.

Using the implicated wallet addresses as a breakthrough point, the task force monitored transaction flows and amounts in real-time, discovering abnormal fund movements with accumulated transaction flows exceeding 30,000 "Tether," equivalent to approximately RMB 217,000. Through expanded correlations, investigators identified 7 related wallets and pinned down the key transaction hashes of 2 related overseas exchanges, each representing a unique identifier for a virtual currency transaction. Thus, a core account of illegal operation was uncovered.

To solve the challenge of anonymizing wallet addresses, the task force cleansed, denoised, and normalized the obtained virtual currency exchange evidential data, structured the data set, and ultimately linked anonymous addresses to real individuals.

On November 30, 2024, the task force pinpointed the criminal gang's origin and unraveled the full scope of the case: 12 individuals including Wu and Qin formed a criminal gang that operated in an "online matching—virtual settlement—logistics distribution" model, creating a covert tobacco-related crime chain.

On January 1 of this year, the task force took action, arresting 12 local suspects in Liuzhou, seizing 84,400 illegal cigarettes, with a transaction volume involving 28,625 "Tether." In the interrogation room, the suspect Huang expressed remorse: "I thought using virtual currency would cover my tracks, never expected to be exposed so quickly."