Chinese Authorities Arrest Over 1,100 People in Crypto Crime Crackdown

Chinese Authorities Arrest Over 1,100 People in Crypto Crime Crackdown
Photo: Philippe Lopez, Getty Images

Chinese authorities are upping their crackdown on all things crypto by arresting more than 1,100 people suspected of using these digital tokens for money laundering. The news comes courtesy of a Wednesday Wechat post from China’s Ministry of Public Security, which oversees law enforcement throughout the country.

The bust spanned 23 different major provinces and cities, and rounded up more than 170 “criminal gangs,” the Ministry said. This is the fifth leg of what local authorities dubbed “Operation Card Broken,” which is meant to crack down on fraudsters peddling phone cards and credit cards across international borders. Back in late 2020, Chinese President Xi Jinping pushed law enforcement to take a tougher stance on telco fraud, after more than 30,000 people were caught committing these sorts of scams in the first half of the year.

Typically, scammers involved with sim-swap fraud or similar schemes will use stolen bank account credentials when they need to launder money. In recent years though, that’s become a bit more difficult, thanks to Chinese authorities getting better at intercepting payments before swindlers can pocket them. To get around this, the Ministry explained, these actors turned to crypto to transfer their funds and convert them between multiple currencies to cover their tracks.

Per the Ministry’s statement, the people caught up in the latest crackdown weren’t only the telco fraudsters themselves, but also folks who offered bitcoin-laundering services to these criminal enterprises.

These arrests are happening amid Chinese authorities fighting to rein in crypto nationwide — last month, China’s State Council put out a statement noting that the country needed to “crack down on Bitcoin mining and trading behaviour” as part of the country’s efforts to take on financial crimes. Naturally, Bitcoin’s overall price took a tumble in the immediate aftermath. It’s worth assuming that this latest crackdown won’t do much to help crypto’s recent slump.