Chinese Authorities Solve a Case of Cryptocurrency-Related Money Laundering

This action was taken as part of China’s increasing efforts to stem illicit financial flows. The crypto money laundering case includes 40 billion Yuan (US$5.6 billion). A total of 93 people were taken into custody, according to a statement released by the local police department on Monday in Hengyang. 

The Chinese Government Has Made It Unlawful to Engage in Cryptocurrency Trading

Hengyang is located in the county of Hunan in southern China. The police also said that they had conducted raids at more than ten different places and confiscated more than one hundred electronic devices. Along with the arrests, a law enforcement operation with the codename “Hundred-day Action” froze around 300 million Yuan worth of assets connected to the case. 

The police said that the criminal group laundered their money via cryptocurrency trading. First, the group acquired cryptocurrency with the stolen funds and then sold the cryptocurrency for dollars. The investigators think that the group obtained dirty money via fraudulent activities related to the telecom industry or illicit gambling.

Trading in bitcoin was made illegal in China in September of 2021. The People’s Bank of China (PBOC) was one of 10 government entities that issued the warning. The warnings made it plain that cryptocurrencies are not recognized as legal currencies in China. In addition, it is against the law for anyone in China to acquire, sell, or trade cryptocurrencies. 

The prohibition includes using offshore exchanges that cater to Chinese nationals. According to the authorities, anyone with Chinese citizenship and who works for international cryptocurrency exchanges will be the focus of an investigation and may be subject to legal action. 

A Complete Implementation of China’s Crypto Prohibition Has Not Been Witnessed

The Chinese authorities enacted the restriction to stop an enterprise that the government considers disruptive in the financial and economic realms. Even though cryptocurrency is illegal there, China is now rated 10th on Chainalysis’ ranking of the most crypto-friendly countries in 2022 as of this month. 

According to Chainalysis’s findings, China’s institutional and individual investors have been affected by the country’s heavy reliance on centralized crypto services. Currently, China is ranked among the top 10 countries in the world regarding the number of people who use digital assets. 

Recent research reveals that the restriction may not be strictly implemented as first envisioned. The Asian economic superpower is placed tenth in the 2022 global crypto adoption index, with a total score of 0.535, thanks to the figures provided by Chainalysis on September 14th.

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