Money laundering has been a significant part of crypto crimes, keeping regulators and watchdogs under constant stress. In a recent revelation, Chinese authorities have unveiled one of the largest groups involved in laundering using crypto.
According to a local media report, Chinese authorities have arrested a gang of 63 members, including the leaders accused of laundering 12 billion Yuan ($1.7 billion) using crypto. The Horqin Branch of the Public Security Bureau of Tongliao City, Inner Mongolia Autonomous Region, disclosed to the media the successful elimination of one of the largest money laundering groups.
In the detailed briefing, the authorities said that the Horqin Branch police started taking an interest in the accused gang after getting tipped off by the Public Security Department of the Inner Mongolia Autonomous Region. The security department noticed anomalies in the capital flow for a bank card issued under the name Shi Mouyuan Construction.
Further investigations into the case revealed that the gang’s operations were not limited to a specific region and spread across several provinces and cities. The gang even had international reach, with some members arrested in Thailand.
The police informed the media that they have been chasing the gang for the past three months and had over 230 police officers spread across 17 provinces, municipalities, and autonomous regions to close down the gang’s networking and operations. They also applauded the much-required arrest of one of their leaders, Ji and Zhang Mou, who had fled to Bangkok, Thailand, to escape police custody.
Sources also confirmed the involvement of Uyghurs personnel in the act, who have reportedly been advised to return to their area of residence. Uyghurs are a Turkic ethnic group native to Xinjiang and distinct from the Han Chinese, the predominant ethnic group in China. They are the second-largest predominantly Muslim ethnicity in China, and Islam is an essential aspect of Uyghur identity.
Authorities have confirmed that the gang has been operational since May last year and has gained illegal funds through various practices. The police reports reveal that the gang was actively engaged in fraud, pyramid schemes, gambling, and other illegal activities. To launder their gained wealth, the members used crypto primarily to launder their illegal wealth. The overseas personnel recruited in the gang helped them in reconverting the crypto assets to upstream the funding of their criminal activities.
However, this is not the first time Chinese authorities have busted such a large criminal group exploiting cryptocurrency for their benefit. Around three months ago, Hengyang Public Security Bureau arrested a gang accused of laundering 40 million Yuan using crypto. The alleged gang had been operational since 2018 and had committed over 300 electronic frauds. They even preyed upon prominent shot personalities, including the director of the Country Public Security Bureau, Liu Xialong.
These incidents explain the rising dominance of crypto-related crimes in the country and also justify the unfriendly nature of the Chinese government towards the crypto assets in the country. Nonetheless, the government’s anti-crypto stance hasn’t prevented the use of crypto or even mining in the country. Todayq News reported last year that China intends to force its state-owned enterprises to stop mining crypto. The state is mulling punitive sanctions for corporations that persist, such as higher energy costs.
Meng Wei, a spokeswoman for China’s National Development and Reform Commission (NDRC), stated during a media briefing that the NDRC aims to oversee industrial-scale bitcoin mining and any engagement by state firms in the industry as China’s top economic planner.
Interestingly, it has been noted that the use of crypto for criminal activities has significantly dropped this year.
Data from Chainalysis, a blockchain analysis firm, suggest that as of July 2022, crypto involvement in illicit activities has dropped by 15%, whereas the overall scam revenue has been down by 65%. However, the end-year reports would give a better and clearer picture.