China’s top prosecutorial authority is intensifying its efforts to counter the escalating tide of cybercrimes by targeting individuals who exploit blockchain and metaverse projects for illicit purposes.
In a recent press statement, the Supreme People’s Procuratorate (SPP) expressed alarm over the rise in online fraud, cyber violence, and infringement of personal information.
According to the SPP, there has been a notable uptick in cybercrimes perpetrated on blockchains and within the metaverse. Criminals are increasingly utilizing cryptocurrencies for money laundering, complicating efforts to track their unlawful proceeds.
Charges Associated with Telecom Fraud Show 64% Increase Year-on-Year Ge Xiaoyan, the deputy prosecutor-general of the SPP, disclosed that charges related to cybercrime and telecom fraud have surged by 64% compared to the previous year.
In addition to the uptick in blockchain-related offenses, traditional crimes such as gambling, theft, pyramid schemes, and counterfeiting have also expanded into the digital realm.
Xiaoyan underscored that charges linked to internet theft have risen by nearly 23%, while charges associated with online counterfeiting and the sale of substandard goods have skyrocketed by almost 86%.
Between January and November, the procuratorates brought charges against 280,000 individuals in cybercrime cases, marking a 36% year-on-year increase. These cases accounted for 19% of all criminal offenses, underscoring the escalating severity of the problem.
Zhang Xiaojin, the director of the Fourth Procuratorate of the SPP, issued a cautionary message to citizens and participants in the digital asset space regarding investment scams prevalent in the local crypto economy. Xiaojin specifically highlighted the emergence of new cybercrimes leveraging the metaverse, blockchain, and binary options platforms. He stressed that digital currencies have become focal points for such activities, emphasizing the necessity for heightened vigilance.
China’s approach to combating digital asset-related crimes contrasts with that of Hong Kong. The special administrative region has implemented regulations favorable to cryptocurrencies to standardize its digital asset ecosystem and safeguard investors without impeding innovation.
China’s Central Bank Addresses Crypto Regulation
In its latest financial stability report, the People’s Bank of China (PBoC) addressed concerns regarding cryptocurrency regulation and decentralized finance. The Chinese central bank stressed the importance of concerted efforts by various countries to effectively regulate the industry.
In 2021, the PBoC unveiled measures to curb the adoption of cryptocurrencies in mainland China, advocating for enhanced inter-departmental coordination to crackdown on crypto activities. Despite the prohibition on nearly all crypto transactions and cryptocurrency mining, mainland China has remained a significant crypto-mining center.
As reported, China is poised to revise its outdated Anti-Money-Laundering (AML) law to tackle the escalating risks associated with virtual assets. The draft amendment, discussed at a State Council meeting chaired by Chinese Premier Li Qiang, will soon undergo review by the national legislature.
Although the complete text of the proposed amendment has not been disclosed, legal experts have suggested that its primary goal is to combat money laundering involving virtual assets. The imperative to address money laundering associated with virtual assets is underscored in a report by Chinese digital news outlet Jiemian, citing Yan Lixin, executive director at the China Centre for Anti-Money-Laundering Studies at Fudan University in Shanghai.
