Chinese Police Halted a Multibillion Dollar Cryptocurrency Money Laundering Scheme.

B. Ali
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In Inner Mongolia, a region in China, police have arrested 63 people in connection with an alleged conspiracy to launder more than 12 billion yuan ($1.7 billion). This demonstrates the opacity of China’s cryptocurrency industry, with 63 people jailed in Inner Mongolia, a northern Chinese region, for laundering 12 billion yuan (US$1.7 billion) in cryptocurrencies.

It is worth remembering that the crypto group began collecting illegal assets through online Ponzi schemes, fraud, and gambling in May 2021. Eventually, they used the money to buy Tether, a stable coin that is linked 1:1 to the US dollar.

According to a statement released by the Public Security Bureau of Tongliao City in Inner Mongolia over the weekend, the funds were divided across several, anonymous crypto accounts before being converted into renminbi.

Even though there is little regulation or legal protection, China, which was formerly the world’s largest market for cryptocurrency investments, has a huge underground population. According to court filings from the bankrupt cryptocurrency exchange FTX’s lawsuit, 8% of FTX’s clientele were from mainland China.

Ten Million Yuan Laundered

As we previously stated, the authorities in the Inner Mongolia Autonomous Region purportedly found a vast cross-border network that processed money thought to have come from unlawful activities such as online pyramid schemes, illegal gambling, and fraud using virtual currency.

This was witnessed after the Shimouyuan Construction Bank’s card funds had unusually high monthly transaction volumes, which ultimately raised the police’s concerns. These transactions totaled tens of millions of yuan. Then, it took three months for special detectives from the Tangliao City Public Security Bureau to infiltrate the alleged money-laundering network.

Millions are Seized, & 63 People are Arrested

Following the special detective’s investigations, about 63 individuals were caught, including two masterminds who had fled to Bangkok, Thailand. In the meantime, the authorities seized 130 million yuan in alleged illegal enterprise revenues.

Investigators claim that the gang changed hundreds of millions of dollars in allegedly illicit cash into various cryptocurrencies before putting them into hundreds of anonymous cryptocurrency wallets. The technique was successfully used by the thieves to launder more than $1.7 billion.

However, this is not the first crime in China. The group of 93 individuals implicated in a similar 40 billion yuan money laundering scheme, were arrested by authorities in Hengyang, Hunan province, in September. A cryptocurrency pyramid fraud worth more than 100 million yuan was exposed online in March by Shanghai authorities.

Hong Kong Adopts a Law to Combat Money Laundering

The Hong Kong government established legislation establishing a licensing structure for suppliers of virtual asset services since every other nation has been dealing with scamming-related difficulties. According to the new Anti-Money Laundering and Counter-Terrorist Financing Bill, VASPs must do the same degree of investigative work and maintain the same amount of records for digital transactions as they do for many traditional transactions.

Moreover, the new rules mandate that financial institutions maintain better records of customer purchases of cryptocurrency assets and codify fines for the illegal marketing of items connected to cryptocurrencies.

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