Blockchain & Crypto

China arrests 1100 people involved in money laundering via cryptocurrency

The Chinese crackdown on crypto trading is coming down hard. Police in China have arrested over 1100 people suspected of using cryptocurrency for money laundering and Internet scams. The Ministry of Public Security has said that by Wednesday, the Police had caught more than 170 criminal groups involved in money laundering through cryptocurrency.

The Ministry further said that these groups charged a commission of 1.5%-5% to convert illegal proceeds into cryptocurrency via exchanges.

Cryptocurrency and Illicit Usage

By design, cryptocurrencies guarantee anonymity and seamless global transactions. Naturally, they have become a means to launder money, finance terrorist activities, and an absolute favorite for cyber criminals and ransomware operators. China recently banned financial institutions and payment companies from providing services to crypto services. It further intensified its crackdown on bitcoin trading and mining.

Global authorities are also tussling with the issue. The IRS has sought statutory authority from the United States Senate to collect more information on cryptocurrency transfers, which it is not able to track and tax.

The U.K Financial Conduct Authority (FCA) had said last week that a significantly high number of cryptocurrency firms are failing to satisfy money laundering laws. This is resulting in firms withdrawing applications to register with the authority.

A United Nations report estimates that about $800 billion to $2 trillion is lost to money laundering each year.

The RBI is worried too

Although the RBI recently issued a compliance note for banks asking not to refer to its 2018 order prohibiting dealing with crypto traders and exchanges, the RBI Governor has recently said that it continues to have “major concerns” about it. It has asked banks to follow money laundering and KYC guidelines.

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Rohit Ranjan Praveer

Rohit is a practicing advocate at Delhi. Beginning as a tech enthusiast, Rohit always had a keen interest in computer forensics and information security. Building upon these fundamentals, he has undertaken extensive research on various techno-legal topics and continues his pursuit pass on valuable information to the masses, with a zeal to build something that outlasts him.​

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