OK Group, the operator of the OKEx cryptocurrency exchange, announced a partnership with the police in the Chinese city of Nanjing to use blockchain to combat money laundering through cryptocurrencies.
OKLink, a subsidiary of the OK Group, will work with the Nanjing Public Security Bureau to develop blockchain-based solutions. They will focus on providing public safety and tracking suspicious digital asset transactions to prevent them from being used for money laundering.
An OKLink spokesman stressed that the blockchain will not be used in day-to-day police activities. To this end, OKLink and the Office will form the Chaintelligence Research Lab. Its specialists will deal with data analysis in the blockchain, risk management and personnel training.
Despite the bans, China continues to use blockchain technology
The task force has the same name as the tool developed by OkLink to track illicitly obtained crypto assets. According to the company, with the help of this product, the police of five Chinese provinces have already been able to solve several dozen cases related to cryptocurrencies. The police managed to seize about 10 billion yuan (about $ 1.5 billion) of illegally used crypto assets. Therefore, despite the ban on mining and cryptocurrency trading in the country, the Chinese government continues to use blockchain technology.
Beijing-based journalist Colin Wu confirmed on Twitter that Chinese law enforcement agencies are ready to use blockchain to combat cryptocurrency fraud and track illicit funds. The technology really makes it easier for the police to find criminals who subsequently confiscated.
Many members of the cryptocurrency industry are increasingly collaborating with local regulators and police. However, Jonathan Levin, co-founder of analytical firm Chainalysis, believes that even complete transparency of cryptocurrency transactions will not stop criminals from committing illegal transactions.
Earlier, OKEx founder Star Xu spoke about cooperation with law enforcement officers in the merger case involving OK Group.
In October 2019, the President of China Xi Jinping said that country should become leader in the field of blockchain.
In June 2021, China developed guidelines for blockchain implementation, serving as a tool for implementing the adopted digital China strategy.
Is blockchain really that good at fighting crime?
Today, it is becoming very popular to develop sets of software tools that help track illegal activity on the blockchain. In an attempt to “help Bitcoin break once and for all from its ties to black market transactions”.
Such platforms ask users to “determine if a particular address from which money transferred to you involved in illegal transactions”. And they help to catch scammers in the crypto space.
Radical transparency often touted as a feature of blockchain technology. Which is understandable from the point of view of commercial firms and governments. And in the case of Bitcoin, this transparency brings additional benefits to ordinary users. For example, if you track all wallet transactions on the exchange, you can spot the theft in time. But if you use cryptocurrency as a means of payment, then the openness of the blockchain can play a cruel joke even with law-abiding users.