China Discovers Major Crypto Laundering Scam, Police On Arrest Spree

The Chinese government has never supported crypto activities since the emergence of the industry. The People’s Bank of China took further actions against the digital industry and banned all local digital assets operations.

Since the crypto ban in China, the government never stopped ringing a reminder that no digital activity can thrive in the country.

But residents of China are still very interested in digital assets despite the government’s negative stance. Research from Chainalysis reported that China is among the global top 10 highest crypto adoption. Moreover, from recent reports, some crypto operations still happen underground without the government’s knowledge.

Chinese Authorities Freeze $42 Million

A local Chinese media recently reported the arrest of 93 individuals involved in crypto-related money laundering.

According to the report, law enforcement agents in Hengyang city discovered a criminal group that laundered 40 billion yuan using digital assets. The illegal fund is approximately $5.6 billion if converted to the US dollar.

The police raided ten sites, arrested 93 suspects, and seized over 100 electronic devices. In addition, the authorities froze about $42 million in an illegal operation called the Hundred-day Action.

In the report, gangs of the Hundred-day Action allegedly bought cryptocurrency with illegal funds and converted them to USD for profits. The Chinese police claimed the source of the funds is telecom scams and gambling.

In the last months, Chinese authorities have hunted and terminated many similar operations and arrested many individuals.

Chinese Public Security Investigates Crypto Pyramid Schemes

In June 2021, the police arrested about 1,100 persons who allegedly used cryptocurrency to launder funds from telecom fraud. Additionally, 170 criminal groups connected to the scheme got terminated.

The Ministry of Public Security said it was the fifth round of investigation targeted at crypto-related money laundering activities.

The Yangpu and Shanghai Public Security Bureau investigated some pyramid Schemes allegedly operating with digital assets in March 2022. After the investigations, they terminated an online scheme that duped $16 million from investors.

The police said the operation was the first digital asset pyramid scheme it cracked in the history of Shanghai. The authorities advised the public to raise risk prevention awareness and fight against pyramid schemes.

Also, the Shanghai Public Economic Investigation Department said it would continue to track down economic crimes that put the citizens’ rights and interests at risk.

On its part, the Chinese government continued to rain bullets on the digital coins industry. The government blocked the Weibo accounts of many digital asset influencers and banned Bitcoin mining activities in the country.

These governments’ actions against digital assets caused banks to freeze cards linked to transactions. In addition, Chinese government action in 2020 reportedly affected 74% of Bitcoin miners in the country.

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