China Police Arrest 1,100 People For Crypto-Related Money Laundering Charges

Thursday 10 June 2021, 5:45 PM AEST - 1 week ago

In the 5th round of an operation named “Operation Card Breaking” by local authorities, the Chinese police force has arrested over 1100 people for offences combining SIM card fraud and money laundering via crypto.

China has been cracking down on crypto-related activity for a while now – but this time the crackdown is not targeting traders or miners.

Black Market SIM Cards Used to Launder Money Through Crypto

In China, access to extra SIM cards is restricted. Seeing as in China your phone number is more or less tied to your identity due to the prevalent use of apps like WeChat Pay, many bad actors attempt to dodge these identity checks via the SIM card black market.

The Chinese government has been heavily targeting this market throughout 2020 and 2021 – and this time, the people arrested were allegedly using these black market SIM cards to launder money through cryptocurrency.

In this case, most of the arrests targeted “independent contractors” who would use the aforementioned SIM cards to sign up on crypto exchange platforms, after which money launderers would give them cryptocurrencies to trade.

Once the fences had moved the crypto around and split it up into multiple currencies – both crypto and fiat – the funds would be sent to wallets and bank accounts designated by the money laundering rings, sans a commission fee ranging between 1.5 and 5%.

Organised Crime Rings Brought Down

Much like the warrants served for an illegal crypto gambling ring back in April, these arrests targeted organised crime syndicates.

The arrests in the cities of Hangzhou, Shaoxing, Anhui, Hefei, Hunan, and Changsha were announced by the Ministry of Public Security on their official WeChat account.

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