In recent years, as the cryptocurrency market has grown larger and individuals involved have gained a deeper understanding of the regulatory rules for cryptocurrency in various countries, various methods of using cryptocurrency for money laundering have rapidly evolved, giving rise to a series of more secretive and sophisticated money laundering techniques involving the combination of fiat currency and cryptocurrency, as well as the mismatch of cryptocurrency with physical assets. This has not only had a certain impact on the financial order of various countries but has also led to real hidden dangers such as foreign exchange losses and a sharp increase in new types of online crimes.
Recently, CCTV disclosed a "case within a case" involving the laundering of 2 billion using cryptocurrency and the sale of personal information of Chinese citizens to overseas institutions. Today, the Sa Jie team will start with this case and share with everyone the latest trends in cryptocurrency-related crimes in China.
01. A special "case within a case" involving cryptocurrency
According to information recently disclosed by CCTV, the Beijing police, in conjunction with the Beijing branch of the State Administration of Foreign Exchange, cracked a major money laundering and personal information infringement case involving an amount exceeding 2 billion yuan. The criminal methods in this case were extremely covert and diverse, and the scope of the case was very wide, involving 15 provinces and cities in China, including Beijing and Shanghai.
Using overseas instant messaging tools to sell personal information of Chinese citizens
According to the economic investigation unit of the Beijing Municipal Public Security Bureau, this case was initiated based on a tip-off. During the investigation, the investigators gradually discovered that the suspect, Yan, used overseas instant messaging tools to form multiple social groups and sell personal information of Chinese citizens in these groups. The information mainly included the citizens' ID numbers, phone numbers, home addresses, and other personally identifiable information. It was estimated that the total number of personal information sold in these groups had reached over a billion records.
During the investigation of the information of over a hundred buyers, Chinese investigative authorities found that the sellers were most likely overseas institutions or individuals. Yan's actions led to a large amount of personal information of Chinese citizens flowing overseas.
Investigators believe that this personal information flowing overseas is likely to be used by fraud groups to carry out customized fraud against Chinese citizens and to induce online gambling. In addition, the Sa Jie team believes that this large amount and variety of personal information of citizens could also be used by overseas professional data analysis and research institutions to study the economic and social development status of China, and may even pose a potential threat to China's national security.
It is worth noting that the public information did not disclose how Yan obtained such a large amount of personal information of Chinese citizens. This means that there is still a long way to go in China's protection of personal information of citizens.
Using cryptocurrency transactions to uncover a 20 billion money laundering case
As mentioned earlier, the quantity of personal information sold by Yan was extremely large, and the amount of criminal proceeds was also substantial. If traditional currency were used for transactions, it would undoubtedly face scrutiny from multiple countries' anti-money laundering regulations, making it difficult to successfully cash out the criminal proceeds in a short period of time. Therefore, Yan chose to only accept cryptocurrency transactions to sell a large amount of personal information of Chinese citizens.
This led to the discovery, during the investigation of this case involving the infringement of personal information, of Lin, who helped Yan cash out the criminal proceeds. According to the investigative personnel, the reason for determining that Lin was a professional money launderer using cryptocurrency was mainly because the flow of funds in the cryptocurrency accounts controlled by Lin exhibited the following characteristics:
- The sources of funds were very complex, indicating the existence of multiple cryptocurrency trading activities.
- Cryptocurrency transactions were fast in and out, with funds staying in the accounts for a short period of time.
- Cryptocurrency transactions were mostly in and out, and a large number of transactions within a certain period of time showed that the inflow was equal to or approximately equal to the outflow.
Based on this, Chinese investigative authorities concluded that Lin was not just an ordinary cryptocurrency trader or "speculator," but most likely a underground money exchanger suspected of using cryptocurrency for money laundering. Upon investigation, it was found that Lin was controlled by an unknown overseas individual and, under the guidance of this individual, organized five other accomplices to launder approximately 20 billion over the course of a year, with the entire group making a profit of over 2 million yuan.
02. New trends in cryptocurrency-related crimes in China, and a gradual shift in regulatory focus
According to information revealed by the Supreme People's Procuratorate at a press conference at the end of 2023, the number of financial crime cases in China in 2023 has decreased but is still at a high level. In the area of cryptocurrency, this statement is consistent with the conclusions of many third-party data research institutions, namely that while the number of crimes has decreased significantly, the amount involved has sharply increased. This is mainly because since 2023, the types of cryptocurrency-related crimes have shifted significantly towards money laundering and illegal foreign exchange trading.
Regulatory trends in cryptocurrency focusing on anti-money laundering and foreign exchange control
With the arrival of the Bitcoin bull market, various cryptocurrencies have also gained momentum. Jurisdictions friendly to cryptocurrencies, such as the United States and Hong Kong, have taken advantage of this trend by launching Bitcoin and Ethereum spot ETF products, achieving some success in exploring the path of compliant cryptocurrency regulation.
However, the Sa Jie team has also noticed that every bull market in the cryptocurrency market is accompanied by significant growth, making it more susceptible to becoming a breeding ground for money laundering crimes. It is worth mentioning that the Sa Jie team has always believed that NFTs have great potential for money laundering, and the main reason they are not widely used for money laundering at present is due to their small market size, which leads to low efficiency and difficulty in "confusing the audience."
In light of this trend, the current regulatory focus in China has shifted towards anti-money laundering and foreign exchange control. It is noted that all economic and financial crimes involving large-scale cross-border fund settlements have become the focus of strict investigation and crackdown. Among them, money laundering, gambling, operating or organizing gambling activities overseas, illegal business operations (illegal foreign exchange trading, illegal capital outflows), and fraud (telecom fraud) are the main targets of crackdown.
Increased tolerance for individual "speculation" in cryptocurrency
From the process of investigating the case involving the sale of personal information using cryptocurrency and the money laundering, it can be seen that the current regulatory authorities in China have shown increased tolerance for individual "speculation" in cryptocurrency.
Firstly, during the investigation of this case, the investigative authorities noticed that a large amount of cryptocurrency held by Lin originated from Chinese citizens within the country. According to the investigative personnel, "The underground money laundering criminal group used RMB funds within the country to purchase virtual currency from domestic cryptocurrency traders and dealers, and then sold the virtual currency to overseas sellers through different virtual currency platforms abroad to obtain foreign exchange."
Secondly, during the process of determining Lin's behavior, the investigative authorities compared his account transaction data with that of ordinary "speculators" and concluded that Lin was not an ordinary "speculator."
Considering that the Sa Jie team has not discovered any criminal cases related to this case, it can be seen that although the public security authorities have obtained a large amount of information related to OTC cryptocurrency traders in China, they have not taken further action. Of course, we do not rule out the possibility of subsequent penalties, but from a macro perspective, the current focus of regulatory authorities in China is not on individuals holding and trading cryptocurrency, and there has been an increase in regulatory tolerance.
04. Conclusion
In summary, cracking down on large-scale cryptocurrency money laundering and related upstream crimes and associated cases has been a major trend in the global cryptocurrency market since 2023. Even in a recent major case involving 60,000 bitcoins associated with illegal public deposit-taking in the UK, there are suspicions of investigative authorities "focusing on the coins and neglecting the people."
The Sa Jie team advises that while cryptocurrency is indeed a good tool for cross-border fund movement, with the advancement of on-chain data analysis tools, the so-called "anonymity" of cryptocurrency has almost ceased to exist. Similar to the money laundering techniques of the suspects in the aforementioned case, tracing and obtaining evidence is only a matter of time and investigative technology costs for investigative authorities.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
