Tech
Six arrested over cryptocurrency money laundering scheme in northeast China, focused on cryptocurrency-related capital flows
Police in China’s northeastern Jilin province have arrested six people in connection with a money laundering case involving the movement of 2.14 billion yuan ($296 million) in cryptocurrency to South Korea.
Jin and Shen, the surnames of the two suspects, allegedly carried out an illegal currency exchange business, according to a statement released by police in the city of Panshi, reported by the China News Service on Friday.
According to police, who did not identify which cryptocurrencies were used in the scheme, some people were robbed of their money.
Law enforcement became aware of the plan when the bank accounts in the names of the suspects were found to be “large”. [daily] transactions” involving a “large number of customers”. According to the police, the business had the characteristics of an illegal underground bank.
Police said the criminal group used mainland Chinese bank accounts to receive funds, which were then used to purchase cryptocurrency on OTC exchanges. The cryptocurrency could then be used to facilitate the exchange of foreign money for cross-border activities, such as e-commerce enterprises and other import and export enterprises.
Mainland China maintains a strict ban on cryptocurrency-related business activities, as Beijing has long viewed them as a threat to financial stability. The central government also has strict exchange controls to prevent capital flight.
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Is Cryptocurrency Too Risky for China?
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Many companies in the industry have since moved much of their remaining operations out of mainland China. Exchanges have also apparently stopped serving mainland users, although some like it Binance has kept workarounds simple which are widely shared online. Since cryptocurrency trading between private individuals remains a gray area from a legal perspective, mainland China recorded cryptocurrency transactions worth $86.4 billion from July 2022 to June 2023 – most of which took place through over-the-counter channels or gray market, peer-to-peer services, according to blockchain analytics firm Chainalysis. In recent years, Beijing has increased its efforts in fighting cryptocurrency. related money laundering. Last December, Chinese prosecutors and forex regulators released a statement pledging to crack down on the use of cryptocurrencies for illegal foreign currency trading, with particular attention to cases involving Tether. In 2022, the police in the northern autonomous region of Inner Mongolia arrested 63 people in relation to the laundering of 12 billion yuan through the use of cryptocurrency.
However, the overall volume of money in cryptocurrency-related money laundering cases has recently decreased. According to Chainalysis, illicit addresses sent $22.2 billion worth of cryptocurrencies in 2023, a 29% decline from the $31.5 billion sent in 2022. “Both legitimate and illicit” trading activity has recorded an “overall decrease” in that period, the company said.