China Arrests Hundreds of People in Crypto Money Laundering Case

Chinese law enforcement agents have arrested approximately 1,100 individuals on charges of using crypto to launder money. The move is clearly a reminder that China is avidly working towards a society where crypto holds a limited or non-existent presence.

China Is Working Against a Crypto Society

In the process of arresting everyone, China has also stated that it has eliminated more than 170 criminal gangs known for committing financial crimes. The individuals in question are believed to have laundered the crypto through fraudulent SIM cards and illicit bank accounts. The arrests were made via agents of China’s Ministry of Public Security.

In a statement, the organization proclaimed:

In order to avoid the investigation and crackdown, fraudsters turned to use virtual currency to transfer the funds involved. Driven by illegal interests, some criminals actively provide services to fraud gangs, helping scam gangs transfer and launder money by purchasing and exchanging virtual currencies and become criminal accomplices.

The statement goes on to say:

After investigation, such illegal criminal gangs usually organize personnel to register on various virtual currency trading platforms with personal bank cards and information, purchase and exchange virtual currencies in accordance with the requirements of fraud gangs and become ‘coin farmers’ who help them launder money. After completing the money laundering process, coin farmers can obtain ‘commissions’ ranging from 1.5 percent to about five percent. The high illegal income attracts many people to participate, causing serious social harm.

In late 2020, China announced that it was increasing its efforts to end fraud-based criminal activities. This led to the establishment of a division known as Operation Card Breaking, which has thus far led to the arrests of more than 310,000 individuals and the end of approximately 15,000 criminal groups.

China has always been up and down when it comes to cryptocurrency, having banned both initial coin offerings (ICOs) and digital exchanges approximately four years ago. Recently, lawmakers announced that they would take a stronger stance on bitcoin and cryptocurrency mining, as well as all related digital currency and blockchain operations. Regulators working with the People’s Bank of China said:

Prices of cryptocurrency have skyrocketed and plummeted recently, and speculative trading has bounced back. This seriously harms the safety of people’s property and disturbs normal economic and financial orders.

Not Everyone’s Happy

Thus far, China has incurred heavy backlash for its decision to end the presence of digital currencies and related businesses within its borders. Canaan Creative – the largest digital mining company in the world after Bitmain – is stationed in China, and released a statement claiming the country was on the wrong path as rescinding mining operations would ultimately decrease job prospects, hurt the nation’s economy, and put China in a lower position on the competitive ladder.

In addition, bitcoin suffered another massive price drop following the news.

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