China’s highest prosecutorial authority is stepping up efforts to combat the growing wave of cybercrimes by targeting criminals who exploit blockchain and metaverse projects for illegal activities.
In a recent press release, the Supreme People’s Procuratorate (SPP) expressed concern over the surge in online fraud, cyber violence, and personal information infringement.
According to the SPP, there has been a significant increase in cybercrimes committed on blockchains and within the metaverse. Criminals are increasingly using cryptocurrencies for money laundering, making it challenging to trace their illicit wealth.
Charges Related to Telecom Fraud Has Risen 64% YoY
Ge Xiaoyan, deputy prosecutor-general of the SPP, revealed that charges related to cybercrime and telecom fraud have risen by 64% year-on-year.
Alongside the rise in blockchain-related crimes, traditional crimes such as gambling, theft, pyramid schemes, and counterfeiting have also expanded into cyberspace.
Xiaoyan emphasized that charges related to internet theft have increased by nearly 23%, while charges related to online counterfeiting and the sale of inferior goods have surged by almost 86%.
Between January and November, the procuratorates filed charges against 280,000 individuals in cybercrime cases, reflecting a 36% year-on-year increase. These cases constituted 19% of all criminal offenses, highlighting the growing severity of the issue.
Zhang Xiaojin, director of the Fourth Procuratorate of the SPP, issued a warning to citizens and participants in the digital asset space regarding investment scams in the local crypto economy.
Xiaojin specifically pointed out the rise of new cybercrimes utilizing the metaverse, blockchain, and binary options platforms.
He emphasized that digital currencies have become hotspots for these activities, urging the need for heightened vigilance.
China’s approach to cracking down on digital asset-related crimes differs from that of Hong Kong.
The special administrative region has implemented crypto-friendly regulations to standardize its digital asset ecosystem and protect investors without stifling innovation.
China’s Central Bank Addresses Crypto Regulation
In its latest financial stability report, the People’s Bank of China (PBoC) addressed issues related to cryptocurrency regulation and decentralized finance.
The Chinese central bank emphasized the need for joint efforts by different countries to regulate the industry effectively.
In 2021, the PBoC announced measures to combat the adoption of cryptocurrencies in mainland China, advocating for stronger inter-departmental coordination to crackdown on crypto activities.
Despite the ban on virtually all crypto transactions and cryptocurrency mining, mainland China has remained a major crypto-mining hub.
As reported, China is set to revise its outdated Anti-Money-Laundering (AML) law in a bid to tackle the increasing 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.
While the full text of the proposed amendment has not been disclosed, legal scholars have indicated that its primary objective is to combat money laundering involving virtual assets.
The urgency to address money laundering related to virtual assets is emphasized in a report by Chinese digital news media Jiemian, citing Yan Lixin, executive director at the China Centre for Anti-Money-Laundering Studies at Fudan University in Shanghai.
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