Crypto Bust: China Collars 93 for Laundering $5 Billion in Digital Currencies
China has become a hotbed of illegal crypto trading lately. The country has earned a good reputation in the international community when it comes to fraud and illegal activities involving cryptocurrencies.
In recent months and years, a number of notable illegal activities originating from the country or involving Chinese nationals have been exposed.
For example, in July 2021, more than 200 victims from at least 20 countries lost $70 million to scammers posing as attractive Chinese women who convinced them to invest in crypto.
In January of this year, a report by Chainalysis was released revealing Chinese crypto investors lost $2.8 billion from infamous carpet tricks. There were eight people arrested involved in the fraud.
In July last year, unidentified Chinese nationals were arrested after helping a fake loan app in India that also involved digital currencies.
But perhaps taking the cake in this conversation is the recent dismantling by Chinese police of a four-year criminal gang activity that was responsible for laundering $5.6 billion.
The big money laundering gang ‘9.15’
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 fundraising and payment sites across China.
The group, which has been operating since 2018, has also facilitated the redemption of illegal funds from fraud, gambling and crypto into US dollars to eliminate traces of illegalities.
Using cryptocurrency, Mou’s group was able to launder 40 billion yuan, which translates to roughly $5.6 billion, Chinese authorities say.
Following the operation by Chinese authorities, 93 suspects were arrested and more than 100 computers and mobile phones used by gang members were destroyed.
Funds of 300 million yuan were also frozen in line with the case. The successful takedown of the gang also resulted in recovering 7.8 million yuan from financial losses of various victims.
Cryptocurrency: The Dark Side
Although this can be considered a win for the authorities, it undoubtedly puts the asset class in a negative light again.
Over the past few years, countries such as the United States and Europe have taken rigid measures to regulate the rise of crypto as an alternative means of financing for their citizens.
One of their compelling arguments is that cryptocurrencies can be used for illegal activities, and these types of assets are difficult 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 is already being processed by the Chinese authorities.
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