Hengyang, a city in southern China’s Hunan province, was reportedly the location of a group that used cryptocurrencies to transact approximately $5.6 billion.
Over the last few months, China’s authorities have stopped many similar schemes and arrested thousands of people.
The ‘Hundred-day Action.
Local media reported that 93 people were arrested by the Chinese police in Hengyang for laundering approximately $5.6 billion through digital assets. In an operation known as the “Hundred-day Action,” authorities raided 10 sites and seized more than 100 devices. They also frozen $42 million.
The gang was accused of purchasing digital assets using illegal funds, and then converting them into American dollars to make profits. According to the police, the money was mainly derived from telecom and gambling scams.
China is not the right place for cryptocurrency activity to flourish. The Chinese government has repeatedly stated that they do not support cryptocurrency activities and have even considered imposing severe measures. September 2021 was the peak of this negative stance when the People’s Bank of China banned all digital assets operations on local soil.
The residents of China, the most populous nation in the world, are still interested in the asset class despite the restrictions. Chainalysis’s most recent research found that China was among the top 10 global leaders in cryptocurrency adoption.
Raids in the Past
Chinese police detained 1,100 people who used digital currencies to allegedly launder money for fraudulent activities in the telecommunications network. The authorities also detained 170 criminal organisations related to the scheme.
The joint investigation by the Yangpu Public Security Bureau (Shanghai Public Security Bureau) into digital asset pyramid schemes took place in March 2022. They stopped an online platform that conned investors to make nearly $16 million over its lifetime.
Police highlighted the operation by claiming that it was the first crack cryptocurrency pyramid scheme in Shanghai’s history.
“The public must be more aware of the dangers and resist pyramid schemes,” said the authorities. According to the authorities, the Shanghai Public Security Economic Investigation Department will continue to fight economic crimes that threaten the legitimate interests and rights of citizens, and will effectively protect the legitimate interests and rights of consumers.”
The first CryptoPotato report was China Cracks Down on a $5.6 billion Crypto Money-Laundering Scheme appeared here.
Marla Brooks – Financial Analysis
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