The Chinese government continues to crack down on the cryptocurrency industry with a new investigation targeting a major Chinese yuan stablecoin issuer.

The team of Trust Reserve, the issuer of the Chinese yuan-pegged stablecoin CNHC, has been detained by the Chinese police, the local blockchain publication PANews reported on May 31.

According to the report, Trust Reserve employees have been out of reach since afternoon May 29 due to multiple arrests. Some employees’ family members have also been reportedly notified about the detentions.

PANews also learned that Trust Reserve’s office in Pudong, Shanghai was empty as of May 31. The door was sealed on May 29, with a notice saying “Judicial seizure, strictly no vandalism.”

Trust Reserve, formerly known as CNHC Group, is the issuer of the Chinese CNHC stablecoin as well as the Hong Kong dollar-pegged stable currency HKDC.

In March 2023, Trust Reserve secured $10 million funding in a round led by KuCoin Ventures, a VC arm of major cryptocurrency exchange, KuCoin. Other prominent investors in the round included KuCoin’s investor IDG Capital and Circle Ventures, the investment subsidiary of the USD Coin (USDC).

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CNHC co-founder Joy Cham previously told Cointelegraph that Trust Reserve launched its offshore yuan-pegged stablecoin, CNHC, in about 2021. The firm was expecting to increase exposure of the stablecoin in the near future as the stablecoin is only listed on one centralized exchange, TruBit Pro, according to data from CoinMarketCap.

Trust Reserve and its representatives did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.

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