Chinese law enforcement busts $5 million virtual currency money laundering ring

Security officers in China have discovered a money laundering network that allegedly used virtual currencies to carry out their nefarious activity. The Hengyang County Public Security Bureau revealed that the gang was responsible for laundering more than $5.5 billion (RMB 40 billion).

A police spokesman revealed in a press release that 93 people had been arrested in connection with the case in more than 10 different locations. Besides seizing funds worth 300 million RMB ($41.8 million), authorities confiscated more than 100 electronic gadgets from the suspects.

The spokesperson revealed that the criminal gang is led by Hong Moumou and engages in fraud and illegal gambling across China. To hide the proceeds of illicit activities, Hong’s gang used an extensive network of local businesses and gold as a front.

The police statement also revealed that the gang turned to virtual currencies to cover the money trail and then converted the assets into US dollars. Local police said they recovered 7.8 million RMB ($1.08 million) belonging to victims of the gang’s fraudulent activities despite their attempts to hide their financial footprint with digital assets.

The crackdown investigation dragged on for months, with reports indicating the gang had been carrying out its nefarious activities since 2018. The gang’s activities were mainly centralized in Hainan, Guangdong, Fujian and Jiangxi, according to police reports.

If found guilty, the suspects could face up to 10 years in prison for their actions, and China’s negative stance on digital assets could see them receive even harsher penalties. China previously made virtual currency transactions illegal and imposed stiff penalties on offenders, including long prison terms and payment of fines.

Chinese witch hunt

China was once home to the majority of BTC miners and accounted for over 70% of the network’s hash rate before government regulators banned the use of digital assets for transactions and impeded banks and financial institutions. to settle transactions.

The witch hunt has been extended to virtual currency mining and service providers, leading to a mass exodus of miners from the country to new jurisdictions. The government viewed the blanket ban as a ploy to promote its digital yuan, a central bank digital currency (CBDC) issued by the People’s Bank of China (PBoC).

Despite the ban, there is speculation that some miners never left mainland China. Authorities said the miners went underground and hid their activities using mining pools and virtual private networks.

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