Chinese Prosecutors Cracking Down on Crypto Scams in Blockchain and Metaverse
Criminals involved in illicit activities using blockchain technology and metaverse projects will face harsher consequences, according to China’s highest prosecutor. In a recent press conference held by China’s Supreme People’s Procuratorate, spokesperson Li Xuehui highlighted the growing trend of cybercrime within blockchains and the metaverse.
Rise of Crypto Money Laundering
Li Xuehui pointed out that crypto money laundering has become a mainstream method for illicit wealth and criminal activities. To combat this issue, China’s procuratorial organs will implement the requirements set by the 20th National Congress of the Communist Party of China. They aim to strengthen the internet legal work of these organs to promote a healthier internet ecosystem.
Warning Against Investment Scams
Zhang Xiaojin, the Director of the Fourth Procuratorate of the Supreme People’s Procuratorate, cautioned the public about the prevalence of “high yield, low risk” investment scams in China’s local crypto economy. He urged individuals to stay vigilant and adapt to evolving criminal strategies.
- The example of “pig butchering” was cited as one of the most prominent scams. It involves establishing a connection with a victim, convincing them to invest in a deceptive digital asset project or exchange, and then disappearing with their invested capital.
- U.S. authorities successfully seized over $9 million in Tether’s USDT stablecoin last year in connection with a pig butchering scam.
China’s Stance on Crypto
In 2021, China banned crypto trading and mining. However, the country has been actively exploring central bank digital currencies (CBDCs) and implementing regulatory policies related to Web3 technologies.
Crackdown on Scams
China’s recent crackdown on blockchain and metaverse scams aligns with the increase in illicit crypto activities in Hong Kong. According to Hong Kong’s Financial Services and Treasury, crypto-related crimes in the region have nearly tripled since 2021.
Hong Kong’s Regulatory Efforts
Hong Kong has taken steps to regulate its local digital asset ecosystem and protect investors. The region has introduced a licensing regime for compliant businesses and has even considered allowing spot Bitcoin ETFs to trade on local exchanges.
As the transitional period for the #VirtualAsset Service Providers licensing system enters its final stage, we are gradually enhancing measures on virtual asset regulation to facilitate market development #ChristopherHui
Hot Take: Stricter Measures Against Blockchain and Metaverse Crimes
The Chinese government is stepping up its efforts to combat blockchain and metaverse crimes. With the rise of cybercrime within these technologies, prosecutors are determined to provide a strong judicial guarantee for promoting a safer internet environment.
As a crypto enthusiast, it’s important for you to stay informed about these developments. Here are some key takeaways:
- Crypto money laundering has become a mainstream conduit for illicit wealth and criminal activities.
- China’s procuratorial organs will implement stricter measures to promote a healthier internet ecosystem.
- Beware of “high yield, low risk” investment scams, such as the pig butchering scam.
- Hong Kong is also taking steps to regulate its local crypto market and protect investors.
By staying vigilant and informed, you can protect yourself from falling victim to crypto scams and contribute to the overall integrity of the blockchain and metaverse industries.
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