Chinese Government Identifies Billions Laundered in Crypto

It appears that China is currently undergoing a crypto cleansing, as the country’s government seems to be keen on purging China of all signs of cryptocurrencies altogether. While there could be a number of reasons why they have suddenly shifted their focus to digital assets, a government official recently shed light on the various illegal activities that are taking place due to cryptocurrencies. The South China Morning Post (SCMP) had reported earlier this week that the International Cooperation Department of the Chinese Ministry of Public Security’s Director-General, Liao Jinrong, had claimed that these digital assets were being used for laundering money out of China. 

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The report stated that these comments had been made by Liao Jinrong on an event related to payments and clearing. Speaking at the event, Liao said that the government had seen a huge increase in the volume of cash that was being laundered out of China by illegal gambling platforms and casino operators. Moreover, the government had also discovered that these illegal operations were using digital assets for their operations, which made it nearly impossible to initiate an investigation into them. Liao even put a number on the case and said that the confirmed outflows had exceeded a whopping 1 trillion yen, equivalent of $14.5 billion. 

He noted that any money laundering activities could have a serious impact on the country’s economic security because gangs would get the opportunity to conspire against China. This also makes it a threat to their security. According to Liao, tracking these digital currencies is difficult in itself, but it gets even more complicated when players in the payment industry also being conspiring with criminal organizations for obscuring the laundered money. He asserted that some significant amendments had been made by the government in policies. Some of these measures include increases the charges of opening an account for non-financial institutions and improving their oversight related to unusual transactions in the country.

Those who open new accounts will need to use their real names and will also need to submit official identification documents for making their transactions. Liao also confirmed that these tough measures had begun to yield fruits because there was improvement in transaction oversight by the government. He confirmed that there was also a reduction in funds transfers to overseas illegal gambling platforms and casinos. This increased risk of money being laundered through crypto could be a major reason for China to introduce anti-crypto policies. These policies aren’t just a novelty; the government had already conducted a campaign last year for pushing out these assets.

Last November, it had been reported by a local news source that the Shanghai Municipal Financial Regulatory Bureau had collaborated with the headquarters of the People’s Bank of China (PBoC) in Shanghai for inspecting crypto activities in the region. A few days later, the city of Shenzhen had also initiated a crackdown on crypto activities. The local authorities had found almost 39 crypto exchanges that were operating in the city and they had been told to cease their operations immediately.

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Bentley Kapoor

Bentley is a cryptocurrency enthusiast and trader, his articles are news and platform review based. His writings are brought to you through his 10 years of experience in the cryptocurrency markets.

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