China has become a hotbed of illicit crypto trade lately. The country has earned quite a reputation in the international community when it comes to scams and illegal activities involving cryptocurrencies.
For the past months and years, there have been a number of notable illicit activities originating from the country or involving Chinese nationals that were exposed.
For example, in July 2021, more than 200 victims from at least 20 countries lost $70 million to fraudsters that posed as attractive Chinese women who convinced them to invest in crypto.
In January this year, a report was released by Chainalysis divulging Chinese crypto investors who lost $2.8 billion from notorious rug pulls. There were eight individuals arrested involved in the fraud.
Last July, unidentified Chinese nationals were arrested after providing help to a fake loan app racket in India that also involved digital currencies.
But perhaps taking the cake in this conversation is the recent dismantling of the Chinese police of a four-year criminal gang activity that was responsible in laundering $5.6 billion.
The Large-Scale ‘9.15’ Money Laundering Gang
Led by a certain Hong Mou, the “9.15” gang is said to be responsible for more than 300 incidents of tele-trafficking involving various collection and payment sites throughout China.
The group, in operation since 2018, also facilitated the cashing of illicit funds from fraud, gambling and crypto into U.S. dollar to eliminate traces of illegality.
Using cryptocurrency, Mou’s group was able to launder 40 billion yuan which converts into more or less $5.6 billion, Chinese authorities say.
Following the operation of 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 line with the case. The successful takedown of the gang also resulted in the recovery of 7.8 million yuan from economic losses of various victims.
Cryptocurrency: The Dark Side
While this can be considered as a win for authorities, it undoubtedly puts the asset class in a negative light once again.
Over the past years, countries like the U.S. 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 these kinds of assets are hard to trace, at least in some ways, making them an attractive tool for money laundering and other related crimes.
Meanwhile, a criminal case for the arrested suspects and Mou are already being processed by Chinese authorities.
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