Chinese police are cracking down on digital financial crimes in the Web3 sector due to a rise in personal identity thefts and fraud. They are closely monitoring the use of emerging technologies such as Chat GPT, cloud computing, blockchain, deepfake AI, and more. This crackdown comes after incidents involving Trojan viruses, phishing sites, infiltration tools, and cyberstalkers.
Key points:
1. Chinese police have identified 79 cases of fraud involving deepfake AI, resulting in the arrest of 515 individuals.
2. In a recent money laundering scheme, 21 individuals were arrested for buying USDT below-market value from Chinese residents and selling them for fiat on overseas exchanges.
3. China has strict capital controls, with Chinese nationals prohibited from purchasing more than $50,000 worth of foreign currencies annually.
4. Some have accused Chinese police of embezzling funds from crypto projects through enforcement measures.
5. The cross-chain protocol Multichain became defunct after its CEO was arrested, and funds belonging to developers and users were converted to stablecoins and privacy coins.
Hot Take: The Chinese police’s crackdown on digital financial crimes in the Web3 sector is a necessary step to protect individuals from identity theft and fraud. However, concerns of embezzlement by the police highlight the need for transparency and accountability in enforcement measures.
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