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Police in China Tear Down a Billion-Dollar Crypto Money Laundering Operation

China Crypto

Sixty-three people have been arrested in connection with an alleged conspiracy to laundered more than a billion dollars.

Ten million yuan washed month to month

According to China News, an extensive cross-border network that used virtual currency to process funds suspected to come from criminal activities, including online pyramid schemes, illegal gambling, and fraud, was discovered by authorities in the Inner Mongolia Autonomous Region.
The police became suspicious of the abnormal transaction volumes after they noticed tens of millions of dollars per month.
Special investigators from the Tangliao City Public Security Bureau spent three months investigating a suspected money-laundering ring.

The investigation included 230 officials in 17 Chinese regions.

63 captured, millions seized

63 suspects were arrested after the investigations, including two ringleaders who had fled to Bangkok, Thailand.
authorities also confiscated about 130 million yuan, which are thought to be the proceeds of criminal activities, according to authorities.
according to investigators, the gang, which used encrypted messaging apps to communicate, first converted hundreds of millions of dollars of alleged criminal funds into various cryptocurrencies before transferring them into hundreds of anonymous crypto wallets, according to investigators.
The system was used to loot more than $1.7 billion successfully.

Hong Kong institutes hostile to money laundering regulation

The Hong Kong legislature passed a law last week establishing a licensing system for virtual asset service providers.
The Anti-Money Laundering and Counter-Terrorist Financing Bill makes it mandatory for VASPs to conduct the same level of due diligence and record-keeping requirements on digital transactions as it is on traditional transactions.
The new regulations require financial institutions to keep better records of consumer purchases of Cryptocurrencies.

Hong Kong has historically served as the world’s main entry point for trade with China, and in October officials mentioned their desire to establish the city as a global hub for virtual assets.
Governments around the world were testing their approaches to regulating businesses related to Cryptocurrencies.

One of the first to establish a regulatory licensing scheme for fund managers and centralized exchanges was the city.
The former licensing effort was voluntary, but the new regulations would require all businesses to submit applications to the SEC for regulatory scrutiny.
Only two exchanges, operated by BC Group and Hashnet, and a small number of money management companies have received licenses to deal in Cryptocurrencies.

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