Chinese authorities have just arrested more than a thousand people who were suspected to be involved in money laundering using cryptocurrency.
It was also discovered that the funds they were laundering come from the wide-scale telecommunication fraud they were operating.
These people, according to the authorities, have a high possibility of being members of criminal gangs that use crypto transactions to avoid law enforcement radar. Banks have immediately cooperated by freezing the suspects’ accounts to prevent the further flow of illegal money.
The authorities believe that 170 criminal gangs have been effectively dismantled with the arrest of the suspects.
Going hard against the bad guys
This latest crackdown wasn’t China’s first drastic effort to pin down criminals who are using the anonymity of cryptocurrency for illegal operations. As early as January last year, authorities have been ramping up efforts to curb illicit cryptocurrency-related activities.
China’s Ministry of Public Security called its latest crackdown as the “fifth round of centralized collection” — a phrase that refers to their recent operations of arresting individuals or groups who use crypto transactions for money laundering activities.
But unfortunately, even with the government’s good intentions, 70% of bitcoin miners in China, of which majority of them are managing legal operations, are affected.
The Chinese government has gone all out in its suppression efforts, by calling for a ban on any bitcoin mining-related operations in the country. Also, major Chinese internet companies like Baidu and Weibo have also censored top search keywords related to cryptocurrencies such as Binance, Huobi, and OKEx.
Because of the intensified crackdown of the government, the banks have also implemented a “freeze wave” where bank accounts that are involved in crypto transactions are immediately frozen.
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