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Police in China arrested more than 1,100 people suspected of using cryptocurrencies to launder money acquired through telecommunication scams, the country’s Ministry of Public Security said on its official WeChat account.
Its investigators have stamped out over 170 criminal gangs to date in an operation to crack down on telecom fraud, the ministry said Wednesday.
The suspected “coin farmers” converted the proceeds of illegal activity into cryptocurrencies on trading platforms and charged their criminal clients commissions of between 1.5% to 5% for the service, the ministry said. “The high illegal income attracts a large number of people to participate, causing serious social harm,” it said in its posted statement.
Investigators are currently looking into money-laundering activity across 23 provinces and regions in China, including Beijing, Hebei, Shanxi, and Liaoning, according to the ministry.
The arrests came about a month after Chinese authorities banned the country’s financial institutions from involvement in crypto-related payment services. The National Internet Finance Association of China, China Banking Association, and the Payment and Clearing Association of China warned investors that digital assets are not supported by real value.
