China’s Supreme Procuratorate has once again brought the crypto market into the spotlight, expressing concerns over the increasing involvement of cryptocurrency in cybercrimes. This scrutiny comes as China strives to tighten its grip on illicit crypto activities and prevent them from occurring.
The Chinese Supreme Procuratorate has noted that new forms of cybercrime utilizing blockchain technology and the metaverse are continuously evolving. Cryptocurrencies have also opened the door for new illegal activities, with scams on the rise. These scams often involve phishing links, fake crypto investments, and fraudulent websites, leading to investors losing their assets. Additionally, the regulator has highlighted the growing use of cryptocurrency for money laundering by criminals.
In an effort to combat these illicit activities, China has ramped up its regulations. Recently, Hong Kong expressed concerns over WorldCoin’s iris identification, citing potential risks to sensitive data. Furthermore, the Chinese Supreme Procuratorate sentenced Zhao Dong, a prominent figure in the crypto space, to seven years in prison for facilitating illicit cross-border crypto transfers.
China’s concerns extend beyond just cybercrimes, as they also worry about the emergence of new payment systems that provide covert channels for money transfers. Corrupt individuals in China are increasingly utilizing the “cold storage” feature of encrypted digital currency to avoid detection online. This poses further challenges for authorities in tracking and preventing illegal activities, particularly in cross-border transactions.
While a study published by Chainalysis reported a decrease in the amount of money received by unofficial crypto addresses in 2023, the threat of illicit crypto activities still looms large. The estimated value of these transactions was $24.2 billion, but these numbers are likely to be higher due to the difficulty in tracking all illegal addresses. As more countries recognize the need to regulate cybercrimes involving digital assets, there is a growing global effort to curb illegal activities in the crypto sphere.
