China arrested over 1,100 people accused of utilizing cryptocurrencies to launder unlawful gains from phone and Internet frauds, according to the Ministry of Public Security.
China tightens their grip on bitcoin trading
The arrests come as Chinese authorities tighten their grip on bitcoin trading. Three industry committees prohibited crypto-related financial and payment services last month, and China’s cabinet, the State Council, promised to crack down on bitcoin mining and trade.
According to the public security ministry, police had caught more than 170 criminal organizations using cryptocurrencies to launder money by Wednesday afternoon.
According to the ministry’s official WeChat account, money launderers charged their criminal customers a commission of 1.5 to 5% to convert unlawful gains into virtual currency via crypto exchanges.
According to China’s Payment & Clearing Association, the number of crimes employing virtual currency is on the rise.
Because of their anonymity, convenience, and global nature, cryptocurrencies have increasingly become a key avenue for cross-border money laundering, according to the association.
Cryptocurrencies have already established themselves as a popular method of payment in illegal gambling. According to the group, about 13% of gaming sites support the usage of virtual currencies, and blockchain technology has made it more difficult for authorities to monitor the money.