China’s crackdown on cryptocurrencies has seen more than 1,100 people arrested for money laundering offences.
The crypto uses allegedly used the digital assets to launder profits from frauds, the country’s Ministry of Public Security said in a statement.
The busts on Wednesday, June 9 involved 170 criminal groups who authorities say hired “coin farmers” to open crypto accounts after bank accounts they used for their alleged scams had been seized.
The ministry said: “The highly illegal income attracts a large number of people to participate, causing serious social harm.”
The arrests made were part of a wider crackdown on crypto in China which was launched less than a month after the government called for greater regulation of digital currencies.
A committee presided over by a member of China’s Politburo wrote in May that it is necessary to “crackdown on bitcoin mining and trading behaviour, and resolutely prevent the transmission of individual risks to the social field.”
It is believed the arrests may cast further doubt on the supposed ‘un-traceability of cryptocurrencies.
Worries about bitcoin’s traceability and the looming threat of government regulations have sent the cryptocurrency plummeting from its peak of more than $63,000 in April. Bitcoin was trading at about $37,600 Thursday morning.
The news comes after the price of bitcoin fell almost 12 per cent on Tuesday as a result of US authorities announcing that they were able to reclaim most of a bitcoin ransom that Colonial Pipeline paid to hacker group DarkSide in May.
Speaking the New York Post on Tuesday, CEO of trading platform Webull, Anthony Denier said: “Criminals have been using bitcoin because of the supposed inability of governments to get at it.
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“If governments can claw it back, that hurts its appeal.”
Cryptocurrency is a secure form of digital money that is, in many cases, anonymous. Cryptocurrencies use encryption to secure transactions, and can be done with minimal processing fees.
Bitcoin is the world’s first decentralised digital currency – meaning there is no central bank or administrator.