Law enforcement officers in the southern Chinese city of Hengyang in Hunan province have arrested 93 people linked to a criminal group. According to the authorities, the group used cryptocurrencies to steal more than 40 billion yuan, which is almost R$30 billion at the current price. As reported by the local portal Weixin, Chinese authorities had been following the scheme for months, but only now managed to make the arrests. In the meantime, they stopped several similar schemes, arresting more than 1,100 people.
The ‘one hundred days action’
The Chinese newspaper highlighted the process of capturing the criminals. According to reports, authorities raided 10 locations and apprehended the arrested individuals. The operation, entitled “Action of the Hundred Days”, also seized more than 100 electronic devices in the possession of the accused. The group also suffered financial sanctions, as they froze around R$220 million in bank accounts. According to the indictment, the allegedly purchased digital assets with funds obtained from illegal sources. It then converted those funds into dollars to hide the source of the profits. Police claimed the money came mainly from gambling and scams on telecom services. Although the amount is high, scammers are not part of any famous scam. For example, OneCoin, an alleged pyramid scheme that was the target of large operations in China. And indeed, the current case shows that these scams do not thrive on Chinese territory. Over the years, the government has made it clear that it does not support cryptocurrencies and has contemplated imposing tough measures. The stance peaked in September 2021, when the People’s Bank of China (PBoC) banned all transactions with digital assets on local soil. However, Chinese citizens remain interested in the asset class even with the ban. As a result, many are targeted by scams involving cryptocurrency investments. The ban makes investors unsafe, making them more vulnerable to scammers.
previous operations
In June last year, Chinese police arrested 1,100 individuals who allegedly used digital currencies to launder money through fraudulent activities on the telecommunications network. In addition, the authorities detained 170 criminal organizations related to the scheme. In March 2022, the Shanghai Public Security Bureau and the Yangpu Public Security Bureau conducted a joint investigation into pyramid schemes using digital assets. As a result, they shut down an online platform that defrauded investors for nearly $16 million during its existence. Police highlighted the operation, saying it was the first cryptocurrency pyramid scheme busted in Shanghai’s history. “Citizens must raise awareness of risk prevention and consciously resist pyramid schemes. We will continue to crack down on economic crimes, jeopardizing the legitimate rights and interests of citizens, and effectively protect the legitimate rights and interests of consumers,” the authorities said.
