Chinese authorities have announced the country’s first case of cryptocurrency confiscation through a court ruling.
according to a report, a Chinese police investigation uncovered a massive online gambling case worth 400 billion yuan (about $56 billion). Cryptocurrency was found to be at the heart of the operation, facilitating illicit activities.
Police said:
The initial investigation of this online gambling case, the amount involved in the case reached 4,000 billion, there were more than 5 people involved, the server was set up abroad, the money laundering method used the hardest virtual currency, the main backbone of the case may be abroad.
This development marks a significant milestone in China’s ongoing efforts to crack down on illegal activities involving cryptocurrencies. The government has been gradually strengthening regulations for cryptocurrency trading since 2017.
The investigation into this encryption issue began 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 involvement in mobile gambling to Jishan Police Station.
A simple mobile gaming situation took an ominous turn when Xiong noticed his colleagues collecting large amounts of money.
The seductive allure of fortune has slowly turned the mobile gaming experience into something sinister. After downloading the game app, Xiong achieved initial success, winning thousands of yuan.
However, his fortune worsened as his bets increased, eventually resulting in losses of over 100,000 yuan (US$14,000). As a result of a thorough investigation, Chinese authorities have uncovered a massive international criminal network that uses cryptocurrency to obscure its illicit activities.
Local reports indicate that this use of cryptocurrency has made it extremely difficult for authorities to trace the source of the funds and understand the full scope of the operation.
A significant development then led to the arrest of individuals in several provinces and the dismantling of 14 suspected criminal gangs.
More than 130 people have been arrested, and authorities have seized computers, mobile phones and bank cards as part of the operation. Local police described it as the first case of virtual currency recovery in the country.
Qiu Moumou – the alleged mastermind and prime suspect – now faces trial after a two-year effort by the authorities. Gambling has been illegal in the People’s Republic of China since 1949.
In September 2021, China officially declared all cryptocurrency trading illegal. Despite the initial ban on cryptocurrency trading in 2019, trading activities continued through foreign exchanges.
So far, investors and companies have cautiously approached entry into the city district. However, this ban has not deterred millions of Chinese individuals from continuing to transact with cryptocurrencies.
Featured image from The Financial Times, chart from TradingView.com