The criminal group bought cryptocurrencies with funds coming from fraudulent activities, which they then converted into US dollars. In March, the authorities blocked an online platform that caused many investors to lose nearly USD 16 million.
Police officers from Hengyang, in the Chinese province of Hunan, stopped a gang that allegedly laundered 40 billion yuan (CNY), equivalent to USD 5.6 billion.
Over the last few months, the authorities have arrested many people in order to wind up similar schemes in the Asian country.
The Criminals Buy Cryptocurrencies with Funds Coming from Fraudulent Activities
According to local news, the police arrested 93 suspected criminals in Hengyang for laundering about USD 5.6 billion with crypto assets. They raided ten premises, confiscated more than 100 pieces of electronic equipment, and froze around USD 42 million.
The alleged criminal group reportedly used illegal funds to buy crypto assets and converted them into US dollars. The authorities said the money came mainly from fraudulent activities like gambling and telecommunications schemes.
Over the years, the Chinese government has maintained that it does not support the crypto industry. It has imposed such strict measures against cryptocurrencies that those businesses cannot flourish in the territory. In September 2021, the situation reached its most adverse level as the People’s Bank of China (PBoC) banned operations with those assets.
The people living in the most populated nation remain interested in crypto assets despite the tight restrictions. The blockchain data analytics company Chainalysis recently estimated that China is among the top 10 global leading cryptocurrency adopters.
The Authorities Have Worked on Similar Money Laundering Cases Involving Cryptocurrencies
In June 2021, the Chinese police arrested 1,100 suspects for laundering funds for fraudulent activities on the telecommunications network with cryptocurrencies. In addition, the authorities stopped 170 criminal organizations allegedly linked to the regime.
Six months ago, the Shanghai Public Security Bureau and the Yangpu Public Security Bureau investigated pyramid schemes that used cryptocurrencies. That led the authorities to block an online platform that caused many investors to lose nearly USD 16 million while active.
The police highlighted it was the first cryptocurrency pyramid scheme they had winded up in Shanghai.
The officers warned that citizens should avoid fallings victim to pyramid schemes, which they must consciously resist. The Shanghai Public Security Economic Investigation Department will take further measures against economic crimes risking citizens’ legitimate rights and interests. They said their objective was to protect consumers’ legitimate rights and interests.
Cryptocurrencies have become increasingly relevant in the economic system worldwide, which Chinese criminal groups know well. They take advantage of the growing interest from people in those assets to launder millions of illicit funds. Therefore, investors should avoid participating in activities that promise to make them wealthy quickly.
Meanwhile, Bitcoin (BTC) is trading at around USD 18,924 and has accumulated a 6.5% loss over the last 24 hours. While its daily trading volume is above USD 49.60 billion, its market capitalization is about USD 362.64 billion, according to CoinGecko.
By Alexander Salazar
