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Over 1,100 people arrested as China bust crypto-related money laundering gang

BEIJING, China: Police in China arrested over 1,100 people suspected of using cryptocurrencies to launder illegal proceeds from telephone and Internet scams in a recent crackdown, the Ministry of Public Security said.

The arrests came as authorities in China step up their crackdown on cryptocurrency trading. Last month, three industry bodies banned crypto-related financial and payment services, and the State Council, China’s cabinet, vowed to clamp down on Bitcoin mining and trading.

The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money.

The money launderers charged their criminal clients a commission of 1.5% to 5% to convert illegal proceeds into virtual currencies via crypto exchanges, the ministry said via its official Wechat account.

China’s Payment & Clearing Association said on Wednesday that the number of crimes involving the use of virtual currencies is on the rise.

Because cryptocurrencies are anonymous, convenient, and global, “they have increasingly become an important channel for cross-border money laundering,” the association said in a statement.

Cryptocurrencies have already become a popular means of payment in illegal gambling activities. Nearly 13% of gambling sites support the use of virtual currencies, and blockchain technology has made it more difficult for authorities to track the money.

Bitcoin surged 8.54% to $36,265 on Wednesday, adding $2,853.31 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 30.8% from the year’s low of $27,734 (roughly Rs. 20.2 lakhs) on January 4.

Ether, the coin linked to the Ethereum blockchain network, rose 2.29% to $2,566.4 on Wednesday, adding $57.55 to its previous close.

On June 9, El Salvador became the first country in the world to formally adopt Bitcoin as legal tender after Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency.

With 62 out of 84 possible votes, a majority of lawmakers voted in favour of the initiative to create a law that will formally adopt Bitcoin, despite concern about the potential impact on El Salvador’s programme with the International Monetary Fund.

Bukele has touted the use of Bitcoin for its potential to help Salvadorans living abroad to send remittances back home while saying the US dollar will also continue as legal tender.