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Chinese authorities arrest criminals that use crypto for money laundering

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TL;DR Breakdown

  • China’s Public Security Bureau cracks down on criminals that use crypto to launder money.
  • It took the authorities over three months to get substantial evidence and arrest sixty-three members of the criminal gang.
  • Nearly $2 billion was stolen by the gang.

Chinese local media reported on the 10th of December that authorities known as Public Security Bureau in that nation had detained a large number of persons suspected of being engaged in the laundering of money via the use of cryptocurrencies.

It took the bureau three months to put an end to a money laundering ring that traded digital virtual currency using blockchain technology, which is a network protocol. Sixty-three suspected criminals were apprehended, and the group was able to wash as much as $1.7 million in illicit funds.

How the Chinese authorities uncover the crypto criminals

Reportedly, the Public Security Department of the Inner Mongolia Autonomous Region sent an early warning to the Public Security Bureau in the month of July.

The warning said that the construction bank card funds flow of Shimouyuan (a Chinese ATM card) was anomalous, and the monthly transaction volume was more than $1.4 million, both of which were suspicious indicators of money laundering.

After doing an investigation and making a lot of research, they discovered that the criminal gang included members from a number of different provinces, autonomous regions, and cities around the country.

Following receipt of the hints, the bureau established a special case team, which began their investigation with Shimouyuan’s bank card. They uncovered the identities of the individuals involved, as well as the hiding place of the funds’ transfer, background data, and the personnel responsible for operation and maintenance.

From September to October, the task force sent 230 police officers to 17 provinces, autonomous regions, and municipalities including Heilongjiang, Guangdong, Beijing, and Henan to begin closing the net.

The task force will also arrest the main criminal suspect Zhang Mou, who has fled to Bangkok, Thailand, as well as technical operators. It has been suggested that the Uygur troops go back to their nation.

Up to this point, a large money laundering gang led by Ji and Zhang that utilized the network blockchain to exchange digital virtual currency has been dismantled.

Additionally, sixty-three criminal suspects have been arrested so far, and a total of approximately $18.6 million worth of illicit income has been seized.

According to the findings of the investigation, the gang is a criminal organization that facilitates the laundering of money for both local and international criminal organizations by using transactions involving digital virtual currencies.

Beginning in May of 2021, the criminal organization employed offshore chat software to build offline employees in a succession. They then transferred monies that were believed to be the proceeds of online pyramid schemes, fraud, gambling, and other illegal activities into virtual digital currency.

After that, they stored them on an anonymous blockchain via the recruitment of a large number of unlawful workers. In order for the upstream criminal gang to receive illicit profits from it, the account address is first changed into RMB and then paid to them.

At the same time, the gang has established safe houses in a number of locations all around the nation. After “receiving the order,” the duty of money laundering will be given to different teams that specialize in money laundering, and the team leaders will recruit low-level employees to carry out money laundering activities.

Following the successful completion of each money laundering operation, various levels of staff, including gang bosses, team leaders, cashiers, and individuals at the bottom of the money laundering hierarchy, will be entitled to commissions in varying degrees.

It is important to note that the criminal organization was able to clean up to $1.7 billion via the use of transactions using virtual currencies.

The Chinese government has encouraged the development of blockchain technology and adopted it for use in the country’s own digital currency, but it has banned the mining and trade of cryptocurrencies.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

Jai Hamid

Jai Hamid

Jai Hamid is an enthusiastic writer whose current area of interest is the blockchain sector. Whenever she is not reading or writing, you can find her tending to her plants in the garden. She strongly believes that crypto is going to transform the world for the better.

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