During the operation, security agencies seized 500 highly professional computers and 1000 mobile phones ( with sim cards), sources said.

Several other electronic gadgets were also recovered at that time from Union Building, sources said.

Sources said they were operating from hired accommodation like Hotel Amar, Hotel Orient, and Hotel Kentover.

"After the preliminary investigation, the security agencies confirmed that all detained persons are from mainland China and all of them are on short term Business and Tourist visa issued from Mongolian Consulate in Hohhot, Inner Mongolia and Erlian, China," sources said.

All of them entered Mongolia since September this year in a group of 50-80 people.

"In the first instance, it seems that all of them are involved in cyber-crime and money laundering activities but security agencies in Mongolia are investigating the issue and scanning the seized computers and mobile phone to know their involvement in anti-national activities in Mongolia," sources said.

Owing to a shortage of facilities to keep large group of over 800 people in Mongolian detention center, the detained Chinese nationals were kept in the basement of the Union Building and Hotel Amar.

Mongolian security agencies said four Chinese nationals and one Mongolian person were later arrested. They were supposed to be the key figures involved in the incident.

They are being interrogated, sources said.

The Chinese embassy in Mongolia said it was ready to cooperate with the Mongolian security agencies over the issue.

"It is hoped that the case will be resolved according to law," the embassy said in a statement.

"The embassy of the People's Republic of China will continue to focus on the case and will closely cooperate with the Mongolian authorities," it said.

Philippines authorities had in the recent past arrested more than 600 Chinese for cyber crimes, including in raid linked to investment fraud.