Six arrested in cryptocurrency money-laundering scheme in northeast China amid focus on crypto-related capital flows
- Police in China’s northeastern Jilin province made the arrests in connection with a scheme that sent US$296 million to South Korea
- Beijing has increased its efforts in combating illicit crypto outflows, including an update to its Anti-Money-Laundering Law now under review
Police in China’s northeastern Jilin province have arrested six people in connection with a money-laundering case involving the movement of 2.14 billion yuan (US$296 million) in cryptocurrency to South Korea.
Jin and Shen, the surnames of two suspects, allegedly carried out an illegal currency exchange business, according to a statement issued by police in the city of Panshi, the state-run China News Service reported on Friday.
Some people were defrauded out of their money, according to police, who did not identify which cryptocurrencies were used in the scheme.
Law enforcement became aware of the scheme when bank accounts under the suspects’ names showed “large [daily] transactions” involving a “large number of customers”. The activity had the characteristics of an illegal underground bank, according to police.
Mainland China maintains a strict ban on commercial cryptocurrency activity, as Beijing has long regarded it as a threat to financial stability. The central government also has strict foreign exchange controls over capital flight concerns.
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