The Chinese authorities have arrested more than 1,000 people suspected of having engaged in money laundering using cryptocurrencies.
More than a thousand people have been arrested in China in a massive crackdown on a network accused of “fraudulent activity” related to cryptocurrencies, the public security ministry said. The latter are in the crosshairs of communist power.
China was once one of the strongholds of bitcoin, the most widespread of virtual currencies. But Beijing took a radical turn in 2019 by prohibiting payments in cryptocurrency, accused of being instruments in the service of “criminal activities”.
And last month, the authorities cracked a call to order, which screwed up the price of bitcoin. The 1,100 people arrested Wednesday across the country are suspected of being part of a “criminal organization”, according to the Ministry of Public Security.
They are accused of having used cryptocurrencies to “launder money” from telephone and internet scams. The arrests took place in particular in Beijing, its region bordering on Hebei, in Shanxi (north) as well as in Liaoning, a province bordering North Korea.
The incriminated amounts were not specified nor what cryptocurrencies had been used. Beijing is worried about the speculative risks posed by cryptocurrencies – anonymous and untraceable – on its financial system as well as on social stability. The holding of virtual currency is however tolerated.
China has tightened restrictions on bitcoin mining activity in recent weeks, the energy-intensive process to create cryptocurrency. Until then authorized in Qinghai, mining is now prohibited there, announced Wednesday the province bordering Tibet and Xinjiang (northwest).
Inner Mongolia (north), a time a stronghold of cryptocurrency mining, announced a similar decision in May, citing environmental reasons. Already in May, the authorities announced the dismantling in the east of the country of a vast fraudulent financial package around cryptocurrencies, involving some 2,000 people.