Officials in China have unearthed a massive “underground bank” worth more than $64 billion.
The People’s Daily reports that the bank was discovered in the eastern Zhejiang province.
The report suggests 410 billion yuan ($64 billion, £42 billion) in foreign exchange transactions were made by the unnamed illegal organisation. 370 people have reportedly been arrested.
Because China’s currently is highly regulated, it has become increasingly difficult for even large foreign exchange deals to be completed. To help the flow of money in and out of China, some investors turn to the underground banks.
According to Bloomberg, a man named Zhao Mouyi transferred billions of yuan through bank accounts meant for international companies, which are not usually available to Chinese citizens.
The People’s Daily, a publication owned by China’s Communist Party, writes:
Zhao circumvented the capital controls by directly transferring yuan overseas and then exchanged the money into foreign currencies at banks including HSBC Holdings Plc in Hong Kong, the People’s Daily said. Zhao then allegedly transferred it to his clients’ accounts, the report said, citing the local police.
The Chinese government has been working harder than normal in 2015 to shut down illegal underground banks. If the $64 billion price tag holds true, this will be the biggest takedown of the year, and equal more than half of all underground banking operations to be seized.