China has intensified its crackdown on financial crimes, especially those involving cryptocurrency. According to a recent work report presented at the Third Session of the 14th National People’s Congress, nearly 3,032 individuals were prosecuted in 2024 for crimes related to crypto money laundering. The Chinese government is making it clear that illegal financial activities will not be tolerated.
Money laundering using cryptocurrencies is a growing problem worldwide. Criminals use digital currencies to disguise the origin of illegal money. Because cryptocurrencies operate outside the traditional banking system, they offer anonymity and speed, making them attractive to money launderers. China’s actions in 2024 show that authorities are determined to put an end to these practices.
How Criminals Use Cryptos to Hide Illegal Money
Crypto money laundering is a method used by criminals to make illegally obtained money look legal. It involves multiple steps to cover up the source of the funds:
- Conversion to Cryptocurrency – Criminals take money from illegal activities and exchange it for cryptocurrency, making it harder to trace.
- Mixing with Other Crypto – The laundered crypto is mixed with other funds using special services, known as “tumblers” or “mixers,” making it almost impossible to track the original source.
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- Fast Transfers Across Multiple Addresses – The mixed cryptocurrency is then rapidly transferred between many different digital wallets to further hide its origins.
- Cash Out or Purchase of Assets – Once the money appears untraceable, criminals either exchange it back into cash or use it to buy valuable goods, like luxury cars, jewelry, or real estate.
This method allows criminals to clean their money while avoiding traditional banking regulations. However, with thousands now arrested in China, authorities are making significant progress in stopping such activities.
China’s Widespread Crackdown on Financial Crimes
Beyond cryptocurrency-related crimes, the Chinese government has also been targeting financial fraud and other illegal financial activities. According to the same report, around 25,000 people were arrested in 2024 for various financial fraud cases. This shows a broad effort to maintain stability and security in China’s financial system.
In addition to crypto crimes, at least 825 individuals were prosecuted for securities-related crimes, including insider trading and financial fraud. These actions show that the Chinese government is not only focused on digital crimes but is also working to clean up traditional financial markets.
Another major crackdown involved two large corporate scandals: the Evergrande Group and the Zhongzhi Group. At least 42 people linked to the Evergrande case and 49 people connected to the Zhongzhi Group were prosecuted for financial crimes. These cases indicate that authorities are taking strict action against corporate fraud as well.
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China’s financial enforcement agencies, including the China Securities Regulatory Commission, are closely working with prosecutors to ensure illegal activities in the financial sector are identified and eliminated. The focus is on improving transparency and security across the entire financial system.
China’s Strong Stance on Cryptocurrency Regulation
Unlike many countries that regulate cryptocurrencies through official policies, China has taken a different approach. Instead of establishing a single regulatory body for crypto, the government has banned cryptocurrency transactions altogether. Multiple agencies enforce this ban, including the People’s Bank of China and law enforcement authorities.
China first restricted cryptocurrencies in 2017 by banning Initial Coin Offerings (ICOs). Later, in 2021, the government imposed a complete ban on crypto trading and mining. Despite these bans, some illegal crypto transactions continued to take place. The arrests in 2024 show that China is determined to shut down all forms of illegal crypto activities.
With thousands of individuals arrested for money laundering and financial fraud, China is making it clear that financial crimes will not be tolerated. Authorities are continuing their efforts to identify, prosecute, and prevent illegal activities within the country’s financial ecosystem. This latest crackdown highlights the government’s strong stance against money laundering through cryptocurrencies, making it one of the most aggressive enforcements in the world.
