The Chinese province of Shaanxi recently experienced a case of virtual currency investment fraud where a victim, Wang, was defrauded out of 410,000 Chinese yuan. The fraudsters convinced Wang to invest in virtual currency through an app by claiming they knew a system loophole that could guarantee profits from crypto. Following Wang’s report, the police were able to swiftly identify and arrest the four suspects involved in the scam. The suspects, Zhai, Li, and two individuals named Li, were apprehended in different cities in Henan Province and are currently under criminal detention for fraud charges. Despite China’s strict regulations on cryptocurrencies, fraudulent activities related to crypto investment continue to pose challenges in the country.
Mainland China has implemented various bans on crypto activities, including trading and mining, with the most recent Bitcoin ban in 2021 affecting almost all cryptocurrency transactions. Despite these restrictions, the Chinese government acknowledges cryptocurrency as virtual property protected by law, allowing individuals to hold digital assets. Recent court rulings in China have recognized cryptocurrencies as legal property and have provided guidelines on handling crypto-related crimes without violating private rights. The country has also seen an increase in Bitcoin mining activities, ranking second globally in the past two years. In response to the growing crypto landscape, Chinese law enforcement has been vigilant in cracking down on illegal crypto operations, such as a recent case where the State Administration of Foreign Exchange dismantled an underground bank engaged in illegal crypto exchange services across multiple provinces.
In a separate incident in Yulin, China, the Public Security Bureau successfully dismantled a major virtual currency investment fraud scheme, arresting four suspects involved in defrauding a victim of 410,000 yuan. The victim, Wang, reported being lured into the investment by individuals he met online who claimed to have a system loophole guaranteeing profits from crypto. Upon receiving Wang’s report, the authorities initiated an inquiry, leading to the arrest of the four suspects in different cities in Henan Province. The suspects are currently facing fraud charges and undergoing further investigation. Despite China’s regulatory measures against cryptocurrencies, fraudulent activities associated with virtual currency investments continue to thrive, prompting law enforcement agencies to remain vigilant and crack down on such schemes to protect investors.
Chinese law enforcement continues to actively combat illegal crypto-related activities, consistently uncovering fraudulent operations. In December 2023, the Chinese State Administration of Foreign Exchange dismantled an underground bank that utilized cryptocurrencies for illegal exchange services, involving over 1,000 bank accounts across 17 provinces. This scheme facilitated transactions worth 15.8 billion yuan to purchase crypto on overseas exchanges and provide yuan exchange services. Furthermore, a court in China recently sentenced members of a gang involved in money laundering using the yuan central bank digital currency to prison terms ranging from seven to 16 months. The gang laundered 200,000 yuan in digital form over four days in Shaoxing, Zhejiang Province. These crackdowns on illegal crypto activities highlight China’s commitment to regulating the crypto market and preventing financial crimes, even as fraudulent operations continue to challenge authorities in the country.
