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China crypto crime: Still ‘top ranked’ for illicit activity, but crime is falling


Despite the fact that the crime in China related to cryptocurrencies is falling as a percentage; it still tops the list of illegal activities. So, according to available data, local citizens have withdrawn about $ 2 billion in digital assets. The indicated amount covers the indicators of the last two years.

In its report, the well-known analytical company Chainalysis noted that in the period from 2019 to 2021; scammers transferred more than $ 2.2 billion to a variety of crypto wallets; which law enforcement officers associate with money laundering. As a rule, as stated in the material, all recipient addresses found to be active on the darknet.

In general, from April 2019 to June 2021, Chinese crypto-addresses passed over $ 4 billion of criminal funds through themselves.

Thus, China is still one of the world’s largest hubs for the movement of illegal crypto-income. Their main sources are money laundering and drug trafficking.

Chainalysis also focused on the fact that the volume of shadow crypto transactions is gradually falling.

“Illegal activity related to cryptocurrencies undoubtedly continues to be a major problem for the authorities. However, over the above period, the number of money laundering operations using virtual money has decreased”, the statement said.

Anti money laundering

The cryptocurrency turnover of criminal funds in the PRC has significantly decreased over the past 2 years: both in pure numbers and in relation to other countries.

Analysts see this for two reasons: government repression against the virtual asset space; and the absence of significant fraudulent schemes like Plustoken.

The total damage from the PlusToken pyramid estimated at about $ 7.6 billion. The report indicates that in most cases, money laundering using cryptocurrencies took place using over-the-counter (OTC) platforms.

The activities of such platforms in China strictly suppressed. In June, Chinese authorities arrested more than 1,100 digital asset money laundering suspects.

We will remind, the previously popular trading platform Bithumb announced the strengthening of measures aimed at combating money laundering.

Chinese miners are moving

Analysts noted that after the mining ban in China, the country’s dominance in the cryptocurrency market continues to wane. However, according to the Cambridge Center for Alternative Finance (CCAF), the share of Chinese miners in the total Bitcoin hashrate has been steadily declining even before the prohibitive measures introduced by the Chinese authorities.

Although it is clear that the latest policy enforcement measures in China have pushed the cryptocurrency business out of the country. Some are moving to Kazakhstan or regions of Africa, where the local economy is currently linked to China through the Belt and Road Initiative.

Iran has welcomed crypto mining to breathe life into its economy, and the country’s miners are helping some Chinese firms build local sites. This means that cryptocurrency miners from China can enter into business agreements with organizations in Iran that are subject to international sanctions, which, in turn, affects the legitimacy of their operations.

In Hong Kong, by contrast, the number of violators is growing. Over the six months of 2021, over 500 crypto-crimes happened, $ 27.5 million was fraudulently appropriated.This is due to the coronavirus – people began to spend more time on the Internet and get involved in cases that they do not understand and in which they suffer losses.

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