Chinese authorities have announced the country’s first-ever case of cryptocurrency confiscation through a court ruling.
According to a report, an investigation conducted by Chinese police has uncovered a large-scale cross-border online gambling case with a turnover of 400 billion yuan (approximately $56 billion). A cryptocurrency was found to be at the core of the operation, facilitating the illicit activities.
The police stated:
Preliminary investigation of this online gambling case, the amount involved in the case reached 4000 billion, there were more than 5 people involved, the server was set up overseas, the method of fund laundering used the most difficult virtual currency, and the main backbone of the case may be overseas.
This development signifies a notable milestone in China’s continuous efforts to crack down on illicit activities involving cryptocurrencies. The government has been progressively strengthening regulations on crypto trading since 2017.
Investigation Into This Crypto Case Initiated In 2021
The case initially came to light on July 28, 2021, when Xiong Xong, a resident of Shayang County in Hubei Province, reported his engagement in mobile phone gambling to the Jishan police station.
The simple case of mobile gaming took an ominous twist as Xiong observed his colleagues gathering substantial sums of money.
The compelling appeal of wealth slowly transformed the mobile gaming experience into something sinister. After downloading the game app, Xiong experienced initial success, winning thousands of yuan.
However, his fortunes worsened as he increased his bets, ultimately leading to losses surpassing 100,000 yuan (USD 14,000). As a result of a thorough investigation, Chinese authorities have reportedly uncovered a large-scale international criminal network that utilized cryptocurrency to obfuscate its illicit activities.
Local reports suggest that this employment of cryptocurrency made it exceedingly challenging for authorities to trace the origin of funds and comprehend the full extent of the operation.
A significant development subsequently led to the arrest of individuals in multiple provinces, dismantling 14 suspected criminal gangs.
Over 130 individuals were apprehended, and authorities confiscated computers, mobile phones, and bank cards as part of the operation. Local police have described it as the first case of virtual currency retrieval in the country.
Qiu Moumou—the alleged mastermind and main suspect—now faces trial after a two-year effort by authorities. Gambling has been illegal in the People’s Republic of China since 1949.
In September 2021, China officially declared all cryptocurrency trading to be illegal. Despite an initial ban on cryptocurrency trading in 2019, trading activities persisted through foreign exchanges.
To date, investors and businesses have cautiously approached entry into the city region. However, this prohibition has not deterred millions of Chinese individuals from continuing to engage with cryptocurrencies.
Featured image from The Financial Times, chart from TradingView.com