China has become a hotbed of illicit crypto trading lately. The country has earned a solid reputation among the international community when it comes to scams and illegal activities involving cryptocurrencies.
Over the past months and years, a number of notable illicit activities originating in the country or involving Chinese nationals have come to light.
For example, in July 2021, more than 200 victims from at least 20 countries lost $70 million to fraudsters who posed as attractive Chinese women who convinced them to invest in crypto.
In January of this year, a report was released by Chainalysis disclosing Chinese crypto investors who lost $2.8 billion due to notorious rug draws. There were eight people arrested involved in the fraud.
Last July, unidentified Chinese nationals were arrested after helping with a bogus loan application in India that also involved digital currencies.
But perhaps the cake in this conversation is Chinese police’s recent dismantling of a four-year-old criminal gang activity that was responsible for laundering $5.6 billion.
The “9.15” Large Scale Money Laundering Gang
Led by a certain Hong Mou, the “9.15” gang is believed to be responsible for more than 300 teletraffic incidents involving various collection and payment sites across China.
The group, in operation since 2018, has also facilitated the collection of illicit funds from fraud, gambling and crypto in US dollars to eliminate traces of illegality.
Using cryptocurrency, Mou’s group was able to launder 40 billion yuan which converts to roughly $5.6 billion, according to Chinese authorities.
Following the operation by the Chinese authorities, 93 suspects were arrested and more than 100 computers and mobile phones used by gang members were destroyed.
Funds amounting to 300 million yuan were also frozen in accordance with the case. The successful dismantling of the gang also recovered 7.8 million yuan from the economic losses of various victims.
Cryptocurrency: the dark side
While this could be seen as a victory for the authorities, it undoubtedly puts the asset class in a negative light again.
Over the past few years, countries like the United States and Europe have taken rigid measures to regulate the emergence of crypto as an alternative means of financing for their citizens.
One of their compelling arguments is that cryptocurrencies can be used for illicit activities and that these types of assets are difficult to trace, at least in some respects, which makes them an attractive tool for money laundering. money and other related crimes.
Meanwhile, a criminal case for the arrested suspects and the memorandum of understanding is already being processed by Chinese authorities.
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