In two years, Chinese cryptocurrency accounts transmitted over $2.2 billion in digital assets to addresses linked to illicit activity such as scams and darknet transactions, according to blockchain analytics company Chainalysis. Large-scale Ponzi schemes, on the other hand, are far less popular in China than in other nations.
According to Chainalysis, between April 2019 and June 2021, Chinese crypto wallets moved more than $2.2 billion in virtual assets to accounts associated with money laundering, drug trafficking, and other criminal activities. Additionally, these addresses got $2 billion in bitcoins from illegal sources.
Even if the figures appear to be high, they have dropped dramatically in comparison to other countries during the last two years. Chainalysis said that the major reason for this is that large-scale Ponzi schemes are no longer widespread in the world’s most populous country.
Chinese criminals who are involved in money-laundering activities employ virtual currencies and crypto exchanges in their operations as well. Furthermore, some of them have developed their illicit businesses on top of these trading platforms.
Most cryptocurrency-based money laundering involves mainstream digital currency exchanges, often through over-the-counter desks whose businesses are built on top of these platforms.
The Asian nation takes action against such unscrupulous actors, citing Zhao Dong, the creator of many Chinese over-the-counter (OTC) firms, as an example. He pled guilty to money laundering charges in May after being detained previously for supporting illicit internet operations. Chainalysis, however, noted that China appears to be taking action against businesses and individuals facilitating this activity.
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