In recent news, Chinese authorities have reminded citizens about the guidelines for cryptocurrencies in the nation. The recent warnings are particularly targeting people making crypto transactions in name of others.
According to local media reports, a Chinese ministry has released warning of the severe consequences of “facilitating” crypto transactions on behalf of other people. The nation has exacted two sweeping crackdowns on crypto, one in 2017, and the other one in 2021.
Reportedly, the first crackdown mainly targeted crypto exchanges, forcing most brokers and trading platforms away from the mainland. The following crackdown in 2021 forced banks to shut down crypto-related transactions and outlawed crypto mining.
Regardless, many Chinese traders remain crypto-keen. Sources reveal that there are evidence of a thriving Chinese over-the-counter trade in coins in 2023, with USDT and Bitcoin trades seemingly the most popular.
According to media reports that there has been a rise in social media posts uploaded by people attempting to recruit third-party crypto transfer “accomplices.” One such post read as follows:
Help people transfer and remit money to earn thousands of dollars a day. It’s easy!
In such type of scams, the scammers pretend to be “recruiters” and say that they are posting lucrative “side jobs.” To this, the Ministry of Public Security warned that individuals who take part in these “schemes” are “very likely to commit the crime of assisting IT network fraud. The ministry, as well as legal and IT researchers, warned that “fixed-term” jail sentences and fines await those convicted of such crimes.
As per an example quoted in the media reports, an individual surnamed Geng reportedly processed almost $1 million worth of crypto-related transactions through his personal bank accounts. The police said Geng received a “favor fee” of up to around $418 for each transaction but he and his associates have since been charged with a range of crimes.
Reportedly, China’s updated criminal code specifies that “helping others to use information networks to commit crimes, and providing Internet access, hosting servers, providing network storage, and providing communication services” are punishable. Sources suggests the code can be applied to those facilitating crypto trading on behalf of others.
If courts rule out the judgement that the crimes are “serious,” perpetrators can be fined and jailed for up to three years. Additionally, two other individuals, both surnamed Li, were sentenced to six to eight months in jail for using their own bank accounts to help others buy crypto.
Last month, a group of stablecoin operators were also detained by police in Shanghai. The ministry and associated researchers claimed that “the most common form of cryptoasset-related crime” in 2022 was money laundering, which accounted for 55% of the year’s total. A further 21% cases were related to fraud, while gambling and pyramid schemes both accounted for a smaller number.
The case with crimes is also similar in Hong Kong, China’s special administrative region. While Hong Kong has been pro-crypto in its approach and lucrative to Web3 firms, it has recorded a significant surge in crimes associated with cryptocurrencies.
It is important to note that despite the strict ban on crypto in China, the nation is troubled with the increasing crimes. Hence, with the future course of action, the nation will have to act efficiently to safeguard its citizens.