Main article: Cryptocurrencies
Blockchain in China
Main article: Blockchain in China
2024: China has recognized cryptocurrency transactions as a form of money laundering. Will be jailed for 10 years
In mid-August 2024, the Chinese authorities recognized transactions with "virtual assets" as money laundering. The Supreme People's Court and the Supreme People's Prosecutor's Office, the country's highest judicial bodies, jointly announced legislative changes during a special press conference. The measures are part of a broader program aimed at tightening anti-money laundering laws to curb the use of cryptocurrencies in illegal financial activities.
According to the new laws, transactions with virtual assets, including those conducted through cryptocurrency exchanges, will be considered actions that try to "hide and conceal the source and nature of the proceeds of crime." Now the Chinese authorities will consider money laundering in the amount of more than 5 million yuan ($685,000) or causing losses in the amount of more than 2.5 million yuan ($343,000) serious offenses. Those accused of such crimes face imprisonment for up to five years and a fine of at least 10,000 yuan ($1,370), or imprisonment for a term of five to ten years and a fine of at least 200,000 yuan ($27,400) in addition to imprisonment.
According to statistics, in the first six months of 2024, the number of court cases related to money laundering through cryptocurrencies increased by 28.4%. This trend will only intensify after the entry into force of new legislation. Control over their implementation will be carried out by the Ministry of Public Safety and the National Supervisory Commission.
Cryptocurrency exchange Bybit still provides access to its products and services to Chinese citizens living outside China, but now only kr provided they reside in a jurisdiction still served by the company.[1]
2023
A resident of China was sentenced to 9 months in prison for buying 13 thousand USDT stablecoins
On August 14, 2023, information appeared that the Chinese People's Prosecutor's Office of the Fuzhou City District sentenced a local resident to nine months in prison for buying 13 thousand. stablecoin USDT
The convict appears in the case file as a certain Chen (Mr. Chen,). It is reported that in February 2022, his acquaintance Lin (Mr. Lin) contacted him to publish his bank card details on the WeChat social network app. Chen subsequently received seven translations in fiat yuan from Lin, which he used to purchase the USDT. The stablecoins were then sent back to Lin. During this process, Chen earned a total commission of 147.1 yuan ($20.16 at the exchange rate as of August 16, 2023).
In China, any transactions with cryptocurrency assets are prohibited. Revealing the exchange of funds between Chen and Lin, the People's Prosecutor's Office of Fuzhou City District sentenced Chen to nine months in prison, suspended for one year, as well as a fine of 5,000 yuan ($685.15).
 | Fraudsters use virtual currency to transfer and launder stolen money. Such activities are a violation of the law, the prosecutor's office said in a statement. |  |
In early August 2023, Jinfeng Sun, political commissioner of the Chinese Network Security Bureau, said that technologies such as blockchain and artificial intelligence were used in a number of cyber campaigns related to fraud and data theft. However, repression seems to be of a wider scope and is not only related to the containment of crime. In July 2023, the $1.5 billion Multichain protocol was closed by the Chinese police after the arrest of its CEO. Since then, the intermediate assets of users, as well as corporate funds, have been mysteriously transferred to private cryptocurrencies and stablecoins and withdrawn.[2]
Chinese state banks ready to support crypto firms in Hong Kong
In March 2023, it became known that state banks China companies are ready to support crypto firms. According to information, Bloomberg the Hong Kong divisions of Bank of Communications Bank of China and Shanghai Pudong Development Bank have either already begun or are going to start offering services to local crypto firms.
Arrest of two Chinese businessmen in the United States for alleged crypto fraud worth $1 billion
In the United States in March 2023, businessmen from China were arrested for alleged crypto fraud worth $1 billion - Guo and Ji were charged with 12 counts, on which they face 215 years in prison each.
The US government was able to withdraw more than $630 million from them in 21 different banks, as well as real estate and expensive cars.
Crypto companies began to return to China to work in the newly created crypto hub in Hong Kong
Crypto companies began to return to China ahead of the introduction of a new crypto regulation regime in Hong Kong. The Chinese authorities intend to make it a "crypto hub."
2022
93 million people in China regularly make transactions in cryptocurrency
63 arrested in China in case of laundering 12 billion yuan using cryptocurrency
On December 10, 2022, it became known that law enforcement agencies in Inner Mongolia (an autonomous region in northern China) arrested more than 60 people for laundering 12 billion yuan (approximately $1.7 billion) using cryptocurrency technologies. Read more here.
Hong Kong plans to legalize cryptocurrency retail
Hong Kong plans to legalize, aiming to retail cryptocurrency become the center of digital assets, which contrasts with the current policy of the mainland. China This became known on October 29, 2022.
The planned mandatory licensing program for crypto platforms is due out in March 2023, according to people familiar with the matter.
Regulators are seeking to allow the listing of larger tokens, but will not support certain coins such as bitcoin or ether[3] to [4].
Arrest of more than 100 people for laundering $124 million using cryptocurrencies
In January 2022, more than 100 people were arrested in China for laundering $124 million using cryptocurrencies. The country has a ban on operations with cryptocurrency, but fraudsters have found a way out. They used people's data from resumes and used it to open accounts on the Binance, Huobi and OKEx exchanges. Money from exchanges was withdrawn on 500 bank cards.
2021
70% of Chinese miners have turned off equipment and sell it after crypto bans in the country
By the end of June 2021, about 70% of miners in China turned off equipment after the introduction of cryptocurrency restrictions in the country, and in the near future this figure may grow to 90%. Kevin Zhang, vice president of business development at Foundry mining company, announced this on his Twitter blog without specifying the sources of his data.
He noted that more and more Chinese engaged in the extraction of cryptocurrencies refuse to do this in the Middle Kingdom, sell equipment and begin to engage in mining in other jurisdictions. According to the Hong Kong edition of HKEPC Hardware, the secondary market has been flooded with a large number of video cards, which are sold at prices close to those recommended by manufacturers and, often, in bulk batches. Offers even reach large marketplaces, including eBay.
According to Kevin Zhang, the repression in China was a crushing blow to those companies that had previously received all the necessary permits from the authorities to extract cryptocurrency. There are still many underground mining farms in China that the authorities know nothing about.
The vice president of Foundry stressed that most of the equipment installed at Chinese enterprises is not suitable for operation abroad, since it does not comply with the norms of Western countries.
Zhang writes that in Sichuan, some power plants have ordered miners to dismantle mining devices and all infrastructure equipment (racks, transformers and more) in one to two weeks. Restrictive measures were introduced in some other regions of the country.
Crypto journalist Colin Wu claims that large manufacturers of mining equipment will also leave China with miners. Bitmain has already suspended the sale of ASIC miners, as it plans to completely transfer production abroad. China will also leave Bitmain executives.[5]
In China, 1110 people were immediately arrested for money laundering through cryptocurrencies
In early June 2021, Chinese police arrested more than 1,100 people suspected of being used for cryptocurrencies money laundering phone and internet fraud. According to the Ministry of Public Security, China more than 170 criminal groups involved in the use of cryptocurrencies for money laundering were detained.
According to the official statement of the ministry, criminals charged their clients a commission of 1.5 to 5% for converting illegal income into cryptocurrency through crypto exchanges. The Chinese Payments and Clearing Association says cryptocurrency-related crimes are on the rise:
| | They are increasingly becoming an important conduit for cross-border money laundering. | |
The association says nearly 13% of gambling sites support the use of cryptocurrencies, with blockchain technology used by virtual money making it harder for authorities to track money.
The arrests came as part of a nationwide anti-money laundering campaign dubbed Operation Card Breaking. By June 10, 2021, Chinese police had arrested more than 311,000 people and liquidated 15,000 criminal organizations.
At the end of 2020, the Central Bank of China, in cooperation with local authorities, also organized a series of arrests aimed at suppressing illegal activities in the gambling business and money laundering. The reports on these detentions indicated that the criminals used the anonymity provided by cryptocurrencies for criminal purposes.
China banned trading in cryptocurrencies in 2019 and has since tightened restrictions on. mining bitcoins Despite China's tough stance towards third-party cryptocurrencies and services related to cryptocurrencies, the country continues not only to actively develop its own digital currency, but also to actively seek its adoption.[6]
2020
In China, began to cut power to miners
In early December 2020, Chinese media reported that the authorities of the city of Baoshan in the Chinese province of Yunnan began to cut off electricity to miners, contacting electricity producers directly. The ban is understood to have been caused by a local conflict of economic interest and probably does not speak to Beijing's push to crack down on cryptocurrency mining. Read more here.
$50 billion of cryptocurrency withdrawn from China in a year
At the end of August 2020, it became known that more than $50 billion of cryptocurrency was withdrawn from China over the year. It is assumed that in this way Chinese investors are trying to bypass the legislation and withdraw their money from the country in a larger volume than expected.
Chinese citizens are allowed to buy foreign currency from financial institutions only in the amount of up to $50,000 per year. In the past, wealthy citizens have bypassed the limit through foreign investments in real estate and other assets. But the government has cracked down and closed those loopholes. A report by Chainalysis suggests that Chinese investors have decided to take advantage of cryptocurrency in response.
Over the past year, China's economy has been hit hard by trade wars and the devaluation of the yuan. At the same time, we observed how cryptocurrency worth more than $50 billion is transferred from addresses based in China to foreign addresses, according to an analytical report.
Cryptocurrency holders use Tether stablecoin to withdraw money. A stablecoin is a digital currency that is usually supported by another asset or group of assets in order to stabilize its value and limit volatility. Tether claims to be pegged to the US dollar. Stablecoins can be used to transfer large amounts, because in theory the value of such a cryptocurrency should not be subject to sharp fluctuations.
The partial withdrawal of cryptocurrency from China can also be explained by the fact that Chinese miners convert the received cryptocurrency to Tether and send it to foreign exchanges. But the report also noted that Tether's movement was most active during the economic crisis. Chainalysis experts are inclined to believe that during this period cryptocurrency traders from East Asia moved their assets to international exchanges, rushing to take advantage of price volatility.[7]
See also
Notes
- ↑ China Classifies Crypto Transactions as Money Laundering in Update to AML Law
- ↑ Chinese man sentenced to 9 months in prison for buying $13K in USDT
- ↑ [https://t.me/shuohuaxia/8212 Hong Kong plans
- ↑ legalize cryptocurrency retail]
- ↑ Bitcoin’s hash rate drops to a six-month low after China shuts nearly 90% of its bitcoin mining
- ↑ Crypto-Related Money Laundering in China Leads to Arrest of 1,100 Suspects
- ↑ Report finds $50 billion of cryptocurrency moved out of China hinting at capital flight against Beijing rules
| The site content is translated by machine translation software powered by PROMT. The machine-translated articles are not always perfect and may contain errors in vocabulary, syntax or grammar. Read original article If you find inaccuracies or errors in the results of machine translation, please write to editor@tadviser.ru. We will make every effort to correct them as soon as possible. |