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Stay informed about the recent crackdown on illegal crypto activities in China. Read on to find out how the Chinese government is addressing these issues and the impact on crypto users.
The Chinese Government Takes Action Against Illegal Crypto Banking
The Chinese government has taken significant steps to shut down illegal crypto banking activities in the country. Local reports indicate that authorities in Panshi City Public Security Bureau, Jilin Province, have arrested six individuals involved in illegal foreign exchange transactions using cryptocurrencies. The perpetrators exploited the anonymity of crypto transactions for their illicit activities.
- Local media reported the arrest of six individuals in Panshi City Public Security Bureau, Jilin Province
- The suspects were found to be using cryptocurrencies for illegal foreign exchange transactions
$295 Million Moved Across Borders Using Crypto Channels
Further investigations by the police revealed that the criminals had transferred funds amounting to approximately 2.14 billion renminbi (RMB), which is equivalent to around $295.79 million. The perpetrators used various channels to engage in illegal foreign exchange transactions, including over-the-counter (OTC) trading of virtual currencies and Korean won settlements.
The criminal gang facilitated foreign exchange transactions for Korean purchasing agents, cross-border e-commerce, and import-export trading companies by using domestic accounts to transfer funds and exchange currencies.
The Crackdown on Illegal OTC Services in Hong Kong
In a related move, Hong Kong authorities under the Hong Kong Monetary Authority (HKMA) have intensified efforts to curb illegal OTC services. The authorities suspect that Chinese nationals are utilizing these platforms to circumvent overseas transfer limits. While the mainland Chinese government has prohibited crypto asset activities by private entities since 2021, Hong Kong maintains its own crypto regulations under the one country, two systems principle.
- Authorities in Hong Kong have targeted illegal OTC services to prevent misuse by Chinese nationals
- Despite the ban on crypto activities in mainland China, Hong Kong continues to allow certain crypto transactions under its regulations
The Resilience of Chinese Crypto Investors
Despite the regulatory restrictions on crypto activities in mainland China, Chinese investors have demonstrated resilience in finding ways to access cryptocurrencies. Some investors have resorted to using underground networks of brokers to obtain cryptocurrencies, while others opt for direct trading methods despite the ban.
- Chinese investors have utilized underground networks to gain access to cryptocurrencies
- Some investors continue to trade crypto directly through in-person meetings and transactions
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