SafeX exploiters jailed as regulators expand crypto fraud and laundering crackdown

Zhang Xinghua was sentenced by a Singapore court to two years in prison for trying to hide millions of stolen crypto tokens through Tornado Cash. The sentence came as global regulators published new warnings about offshore platforms that criminals use to break in undetected.

The 38-year-old pleaded guilty to conspiring to steal $6.9 million from the SafeX crypto exchange. 

Zhang was the third member of the crew that raided the SafeX vault between June and August 2025, following an issue between their employer, King Coder, and SafeX’s parent company. 

SafeX attackers moved funds through Tornado Cash 

Zhang attempted to launder funds through Tornado Cash, a platform built to hide transaction trails. However, Singapore authorities said they recovered $2.1 million in crypto tokens tied to the case. The arrest was made after SafeX’s low-balance alarm was triggered in August 2025, prompting internal checks and a police report. 

Currently, about $4.8 million remains outside Singapore’s reach because it was sent to crypto platforms outside Singapore’s legal jurisdiction. 

After further investigation, it was found that Zhang also made use of his wife’s account to pay back $95,000 worth of Bitcoin after tracking some of the money there. 

The unrecovered $4.8 million is an example of the blind spot the Financial Action Task Force (FATF) condemned in a recent report. 

While the mixer worked to hide the trail, it couldn’t prevent detection, arrest, and prosecution. What it accomplished was to create enough obstacles for nearly all the funds to stay hidden. 

What did the FATF say about offshore platforms?

In its recent report, FATF warns that offshore crypto platforms are serving as a route for money laundering across borders.

The report titled “Understanding and Mitigating the Risks of Offshore Virtual Asset Service Providers” found criminals taking advantage of places with weak or nonexistent crypto rules to move stolen funds and also fund terrorist activities. 

FATF President, Elisa de Anda Madrazo, stated plainly that “this report exposes how VASPs create blind spots that criminals are clearly exploiting.” 

The document goes ahead to show how offshore providers sometimes pose as regular customers to access services rendered by licensed exchanges, making it harder for authorities to track their transactions. 

By constantly switching blockchains and hopping between wallets, they are able to stay one step ahead of the investigation.

According to the FATF, the solution is simple: regulate crypto companies based on what they do, and not where they are based. 

Countries should require offshore service providers to obtain licenses to operate regardless of where the company’s headquarters is. 

Additionally, the FATF called for stronger penalties to be imposed on non-compliant platforms, urging better coordination between financial intelligence units across several countries. 

Does enforcement actually work?

Zhang’s arrest and prosecution show that law enforcement can be effective when they have the proper tools, even though the accused used mixers to avoid detection. 

Authorities were also able to track and recover 30% of the stolen money, and are only stopped from the remaining 70% because of regulatory gaps that FATF is trying desperately to close. 

Ultimately, this proves that regulators are working hard to ensure that they stay ahead of criminals. The HMRC’s £4.1 million tender is proof of countries working hard on clamping down on crypto crimes.

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