China Cracks Down a $5.6 Billion Crypto Money-Laundering Scheme (Report)

Law enforcement officers in Hengyang (a city in southern China’s Hunan province) have busted a criminal group that used cryptocurrencies to launder 40 billion yuan (approximately $5.6 billion).

Over the past few months, Chinese authorities have stopped numerous similar schemes, arresting thousands of people.

The action of the hundred days

According to local coverage, Chinese police arrested 93 people in the city of Hengyang on suspicion of laundering about $5.6 billion in digital assets. Authorities raided 10 physical locations, seized more than 100 electronic devices and froze about $42 million in an operation dubbed “Operation One Hundred Days.”

The gang allegedly bought digital assets with illegal funds and then converted them into US dollars to launder profits. Police claimed the source of the money was mainly from gambling and telecommunications scams.

China is not a place where cryptocurrency activities can thrive. Over the years, the national government has made it clear that it does not support the industry and contemplated imposing tough measures. The adverse stance peaked in September 2021 when the People’s Bank of China (PBoC) banned all transactions with digital assets on local soil.

Despite the restrictions, residents of the world’s most populous nation remain interested in the asset class. Recent research by Chainalysis estimates that China is among the top 10 global leaders in cryptocurrency adoption.

Previous incursions

In June last year, Chinese police arrested 1,100 people who allegedly used digital currencies to launder funds for fraudulent telecom network activities. In addition, authorities arrested 170 criminal organizations linked to the scheme.

In March 2022, the Shanghai Public Security Bureau and the Yangpu Public Security Bureau conducted a joint investigation into pyramid schemes using digital assets. As a result, they stopped an online platform that defrauded investors of almost $16 million during its existence.

Police highlighted the operation, saying it was the first cryptocurrency pyramid scheme busted in Shanghai’s history.

“The general public should raise awareness of risk prevention and conscientiously resist pyramid schemes. The Economic Investigation Department of Shanghai Public Security will also continue to crack down on economic crimes that endanger the legitimate rights and interests of citizens and effectively protect the legitimate rights and interests of consumers,” the authorities said.


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