Chinese authorities have detained over a thousand individuals as part of a broad campaign against a network accused of engaging in "fraudulent activities" related to cryptocurrencies in the communist country, according to the Ministry of Public Security. The police have identified more than 170 criminal groups that used cryptocurrencies for money laundering and fraud, with the campaign extending to 23 provinces and cities, as reported by Bloomberg.
China is considered one of the strongholds for the widely used cryptocurrency "Bitcoin," but Beijing drastically changed its stance in 2019 by banning cryptocurrency payments, stating that they were being used as a tool in support of "criminal activities." Last month, authorities issued a warning in this regard, which led to a decrease in Bitcoin's price.
The Ministry of Public Security indicated that 1,100 people were arrested on Wednesday across the country, suspected of being part of a "criminal organization," according to the French news agency. These individuals are accused of using cryptocurrencies to "launder" money obtained from phone and internet scams. Beijing is concerned about the speculative risks posed by cryptocurrencies, which are untraceable and anonymous, affecting its financial system and social stability. However, owning a virtual currency is permitted.
China has tightened restrictions on Bitcoin mining activities in recent weeks, an energy-intensive process. In May, authorities dismantled a massive fraud network in the east of the country linked to cryptocurrencies that involved around 2,000 people. This year, China has intensified its crackdown on cryptocurrencies following the frenzied rise of Bitcoin and other cryptocurrencies at the beginning of 2021, amid long-standing government concerns over potential fraud, money laundering, and business losses.
