Chinese Police Arrest 1.1K People on Crypto-Related Money Laundering Charges

This is the fifth round of a nationwide crackdown on money-laundering activities related to telecom fraud in China, dubbed “Operation Card Breaking.”

AccessTimeIconJun 9, 2021 at 3:54 p.m. UTC
Updated Sep 14, 2021 at 1:08 p.m. UTC

Chinese police have arrested over 1,000 people on money-laundering charges, alleging they used cryptocurrency to help them evade the law. 

This is the fifth round of a nationwide crackdown on money-laundering activities related to telecom fraud in China, dubbed “Operation Card Breaking,” according to a statement released by the Ministry of Public Security on its official WeChat account on Wednesday. 

The most recent round targeted people that allegedly used cryptocurrencies to assist money-laundering activities. The Chinese police have arrested more than 1100 people and eliminated 170 criminal organizations, according to the Ministry of Public Security WeChat account. 

Telecom criminals tend to use fake or stolen SIM cards and compromised bank accounts to launder their money through the traditional banking system. That has become more difficult since the Chinese police tightened surveillance on commercial banks and black markets for SIM cards and bank accounts. 

Chinese police have been cracking down on crypto-related money-laundering crimes across 23 provinces and regions, including Beijing city as well as Hebei and Shanxi provinces. 

China continues crackdowns

The State Council called for a tough crackdown on telecom fraud in October 2020. The Chinese police then started Operation Card Breaking. It has arrested more than 311,000 people and eliminated 15,000 criminal organizations, according to the Ministry of Public Security.

Executives from two of the largest crypto exchanges that provide services to Chinese investors were taken in by the Chinese police last year to assist in undisclosed investigations. OKEx founder Star Xu and Huobi’s chief operating officer Jiawei Zhu were under police custody for their over-the-counter trading services that were potentially involved in money laundering. Dong Zhao, one of the most prominent Chinese OTC traders, was also taken into custody by the Chinese police late last year. 

The three financial industry associations issued a warning to deter their member commercial banks and payment platforms from dealing with crypto firms. 

UPDATE (June 9, 2021, 16:55 UTC): Updated with additional information.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Crypto Derivatives Exchange Bybit to Settle Options Contracts in USDC

The company will be using the second-largest stablecoin by market cap for its relative stability.

CoinDesk - Unknown
2
CoinDesk - Unknown
Polkadot Chief Gavin Wood Announces Blockchain Governance Upgrade

The platform's “Gov2” is set to launch on Kusama “imminently,” following a final professional audit of its code, he said.

CoinDesk - Unknown
3
CoinDesk - Unknown
What It’s Like to Work as a DAO Bounty Hunter

Meet "T Wells," a 30-something former educator who, in 2021, began working for “bounties” (or gigs) in the DAO ecosystem.

CoinDesk - Unknown
4
CoinDesk - Unknown
Luna (LUNA) vs. Luna Classic (LUNC): What Is the Difference?

After the implosion of the Terra network and its tokens, the community approved a plan to relaunch the project, leaving many confused about the new names. Here’s a guide to the two different Terra blockchains and which tokens belong to which.

CoinDesk - Unknown