More than 1,000 people have been arrested in China, as part of a massive crackdown on a network accused of “fraudulent activities” related to cryptocurrency in the communist country, the Ministry of Public Security announced.
China was one of the strongholds of “Bitcoin”, one of the most popular virtual currencies.
But Beijing radically changed its stance in 2019 by banning cryptocurrency payments, saying they were being used as a tool in the service of “criminal activities”.
And last month, the authorities issued a warning in this regard, which led to a drop in the price of “Bitcoin”.
The Ministry of Public Security said 1,100 people were arrested on Wednesday across the country, suspected of being part of a “criminal organisation”. They are accused of using cryptocurrency to “launder money” from telephone and internet fraud.
Beijing is concerned about the speculative risks that cryptocurrencies – which are anonymous and untraceable – pose to its financial system, as well as to social stability. However, owning a virtual currency is allowed.
China has tightened restrictions on bitcoin mining activity in recent weeks, a massively energy-intensive process.
And in May, the authorities announced the dismantling of a huge scam network in the east of the country linked to cryptocurrency, which included about two thousand people.
The cryptocurrency Bitcoin is regularly criticized by regulators for its illegal uses, but the transparency of its network can turn against criminals, as recently happened to the hacking group Darkside.
The complex tracking of financial transactions has become an industry in itself. In recent years, companies specializing in blockchain analysis for cryptocurrency have emerged, such as Chain Analysis in the United States or Elliptic in Britain.
A report published by Chain Analysis in February showed that the value of cryptocurrency operations for illegal purposes amounted to $10 billion in 2020, or 1% of total cryptocurrency activity last year and less than half the level recorded a year ago, when these activities reached the level of a record $21.4 billion.
