Chinese Authority Arrests 63 Suspects for $1.7 Billion Crypto Money Laundering

As China intensifies its opposition to cryptocurrency crime, the authorities in Hunan Province have arrested 63 people for allegedly laundering about $1.7 billion through cryptocurrency. 

The Hengyang County Police Department, through its official WeChat handle, revealed that the suspects, under the leadership of an individual identified as Hong, have been using crypto to convert their loot to U.S. dollars since 2018. Hong, alongside the suspects, had been laundering gains from fraud and gambling across China. 

Further, during the arrest, the police retrieved more than $41.9 million, 100 mobile phones, and computers from the suspects. The recent development confirms the fear of critics concerned about using cryptocurrency for illicit activities.

This is not the first time China has taken serious measures against cryptocurrency perpetrators. In June 2021, China arrested over 1,100 people suspected of money laundering using telephones and the internet. Further, also in Hunan, authorities arrested 93 people for allegedly laundering $5.6 billion through cryptocurrencies last September.

Cryptocurrency is struggling to strive in the Chinese government’s domain. In September 2021, the Chinese authorities banned cryptocurrency outright, forbidding the use of virtual assets for payments, as well as crypto trading and mining. 

Initially, the government aimed to curb capital outflows and money laundering using cryptocurrency. The Chinese government has since promoted its Central Bank Digital Currency, facilitating around 100 billion yuan since August 31. The project is still in the pilot phase in 23 cities on China’s mainland, with plans to expand to more provinces in the coming months. 

Notably, the ban has pushed virtual assets transactions to fall rapidly. Between July 2021 and June 2022, virtual assets transactions in China slumped by 31%.