Chinese crypto wallets are a huge player in crypto illicit activities as they sent more than $2 billion in digital assets to addresses linked with illicit activities between 2019 and 2021 as we are reading more in our latest crypto news today.
The blockchain data provider Chainalysis revealed that Chinese crypto accounts sent over $2.2 billion worth of crypto to addresses linked to criminal activities like frauds and darknet transactions in a period of two years but large-scale Ponzi schemes are less popular in China than in other countries. As per the research by Chainalsysis, Chinese crypto wallets transferred more than $2.2 billion worth of crypto assets to accounts related to money laundering, drug trafficking, and more, and these addresses recieved another $2 billion in crypto from criminal sources.
The numbers are quite high but they dropped dramatically over the two-year period compared to other countries. Chainalysis explained that the main reason behind it was the Ponzi schemes are not common in the world’s most densely populated nation anymore. However, it noted that China is the desired hub of the global fentanyl trade and stated that many drug producers employed digital assets to execute tranactions.
Chinese criminals involved in money-laundering operations use virtual currencies and crypto exchanges in their affairs. Some of them even created illegal companies on top of these trading venues. According to Chainalysis, the Asian nation took measures against the bad actors and gave an example with the founder of a few Chinese over-the-counter businesses Zhao dong. He pleaded guilty in May to money laundering crimes and got arrested by the authorities earlier for helping in internet illegal activities. While crypto frauds and employing digital assets in scams are common in China, the authorities in the country imposed plenty of punishments on these involved in such criminal affairs.
The principal actors in the PlusToken Ponzi scheme will spend the next 11 years in jail and the scam managed to defraud the investors out of $2.25 billion worth of crypto assets. The officials outlined the operation as the major win since it was one of the biggest Ponzi schemes happening in China. In addition, the authorities fined two of the key members of PlusToken with fines of $18,000 and $913,000.