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Chinese Miners Evade Crackdown, Retain Bitcoin Dominance

In this post:

  • China seizes $20M and arrests 193 in a Tether money laundering bust.
  • Despite the ban, the Chinese are among the top stablecoin users.
  • Chinese miners rapidly regain Bitcoin hashrate after the crackdown.

Chinese police found a $1.7 million loot of illegal gambling money in a recent raid on a casino room, boosting care for the participant’s welfare. With over $9 billion being laundered through the Tether stablecoin on the popular underground banking platform, it was one of the biggest financial scams. 

Among those efforts, Chinese authorities ‘ locked down’ two underground operations in Fujian and Hunan, and cops successfully froze 149 million yuan worth $20 million linked to the USDT banking operations. In Chengdu, a Chinese city, the Tether stablecoin was used to exchange foreign currencies. The officials from the city police state broadcast that they had been leading the arrests of 193 suspects in 26 provinces.

Tether money laundering raids

According to the police statement, the underground USDT operations started at the beginning of 2021 and were mainly used to smuggle medical products, cosmetics, and investment assets overseas.

The authorities recurrently destroyed two networks of underground activities, one in Fujian Province and the other in Hunan Province. The police also froze $20 million from USDT banking transactions.

With China’s complete crypto prohibition in the background, the notion of crypto traders successfully outwitting the ban through their alternative ways of using crypto assets is nothing short of amazing.

Kyros Ventures, a renowned report outlining this, showcases Chinese traders as one of the biggest stablecoin stakeholders in the world. This report shows how many days it has been in existence. According to the survey, 3% Stablecoins, the third most popular stablecoin among Chinese investors (58%), are the last only to Vietnamese investors. This fastens their uptake of transparency and asset classification along with that of their assets.

Evading China’s crypto ban

The Chinese government has the strongest control over all cryptocurrencies and cryptocurrency platform operations, which allows trading and related activities such as cryptocurrency mining. However, a number of local communities have deliberately violated this ban over the years. 

During the Bitcoin mining ban, when China was the leading investor in the hash rate of the Bitcoin network, miners immigrated to other jurisdictions: the USA (29%), Kazakhstan (16%), and Russia (7%). Nevertheless, in less than a year, the Chinese contribution to the total hash rate reached second place after the ban, which was critical proof of the ability of miners to respond quickly to the changing regulatory environment.

Additionally, the volume of CEXs decreased after China banned them, which led Chinese users to turn to DEX to avoid these problems. The adoption of the cryptocurrency rule saw a spike in the number of Chinese traders using DFM-based protocols, and some remain untapped using virtual private networks.

 

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 decisions.

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