China’s Supreme People’s Procuratorate Cracks Down on Blockchain Crime
China’s Supreme People’s Procuratorate has pledged to punish criminals who exploit blockchain technology and metaverse projects for illegal activities. The rise in cybercrime on blockchains and in the metaverse has become a growing concern, according to Li Xuehui, a spokesperson for the Supreme People’s Procuratorate. Xuehui highlighted cryptocurrency money laundering as a popular method for illicit wealth accumulation by criminals.
The Danger of Investment Scams
- Director Zhang Xiaojin from the Fourth Procuratorate of the Supreme People’s Procuratorate warned against investment scams that promise high yields with low risk.
- Pig butchering is one such scam, where criminals establish trust with victims, convince them to invest in fraudulent digital asset projects or exchanges, and then disappear with their funds.
- Last year, US authorities seized over $9 million in Tether’s USDT stablecoin connected to this type of scam.
China’s Crackdown on Blockchain Criminals
In 2023 alone, Chinese authorities prosecuted over 42,000 individuals involved in electronic fraud and crypto-related scams. To further combat these crimes, the Supreme People’s Procuratorate plans to implement internet legal work to create a safer online environment.
Hong Kong’s Response and Regulatory Landscape
As China takes a firm stance against blockchain crime, Hong Kong has seen a surge in illicit activities within its own crypto ecosystem. However, Hong Kong is simultaneously implementing crypto-friendly regulations to protect investors while fostering innovation.
Licensing Regime and Bitcoin ETFs
- Hong Kong has introduced a licensing regime for compliant businesses in the digital asset space.
- The city is also considering allowing spot Bitcoin ETFs to trade on local exchanges following approval from the US SEC for 11 issuers.
China’s Ban on Crypto Trading and Mining
While China has prohibited crypto trading and mining since 2021, the country has made significant progress in the development of central bank digital currencies (CBDCs) and web3 regulatory policies.
Hot Take: Strengthening Blockchain Security and Investor Protection
In response to the growing threat of blockchain-related crime, China’s Supreme People’s Procuratorate is taking decisive action to punish criminals exploiting this technology. By cracking down on illicit activities, China aims to create a safer digital asset ecosystem. Meanwhile, Hong Kong is striking a balance between regulation and innovation, implementing measures to protect investors while fostering growth in the crypto sector. As both countries navigate their respective paths, it is crucial for investors and participants in the crypto space to remain vigilant and adapt to evolving criminal strategies.
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