Chinese authorities have dismantled an underground bank accused of illegally utilising cryptocurrency for currency exchange operations, involving approximately $295.8 million.

Six suspects were arrested in Northeast China's Jilin province for allegedly facilitating the illicit transactions between the Chinese yuan and the South Korean won.

The suspects reportedly exploited the anonymity and decentralisation features of cryptocurrency to conduct these illegal activities, using domestic accounts to receive and transfer funds and conducting over-the-counter cryptocurrency transactions.

This crackdown underscores China's ongoing efforts to enforce strict capital control policies and curb the misuse of cryptocurrencies for circumventing regulations.