Reuters claims that Chinese cryptocurrency addresses have sent $2.2 billion in virtual currency to illegal addresses such as scams and the dark web in the last three years

Reuters recently published a report saying that Chinese crypto virtual currency addresses sent more than $2.2 billion worth of virtual currency to addresses linked to illegal activities such as fraud and dark web operations between April 2019 and June 2021, according to a report released on Tuesday by blockchain data platform Chainalysis.

It adds that these addresses also received $2 billion in crypto virtual currency from illicit sources, making China a major player in virtual currency-related crimes. The report analyzes virtual currency activity under the Chinese government's crackdown.

However, Chainalysis said that in absolute terms and relative to other countries, the volume of transactions with illegal addresses in China has fallen sharply in the two years. The biggest reason, it noted, is the absence of large-scale Ponzi schemes, such as the 2019 scam involving cryptocurrency wallet and exchange PlusToken, which originated in China.

Users and customers lost an estimated $3 billion to $4 billion in the PlusToken scam.

Chainalysis reports that the vast majority of illegal money flows in China for crypto virtual currencies are linked to scams, although this has also declined.

This is likely due to increased awareness of PlusToken and the crackdown in the country," Gurvais Grigg, Chainalysis' global public sector chief technology officer, said in an email to Reuters. "

The report also cited trafficking from China of fentanyl, a highly effective narcotic painkiller used to treat severe pain or post-surgical pain.

Chainalysis said money laundering is another notable form of cryptocurrency-based crime that is conducted disproportionately in China.

Most cryptocurrency-based money laundering involves mainstream digital currency exchanges, usually through over-the-counter transactions, whose businesses are built on top of these platforms.

Chainalysis noted that China is taking action against businesses and individuals who facilitate such illegal over-the-counter trading activities. It cited the example of Zhao Dong, the founder of several Chinese OTC firms, who pleaded guilty to money laundering charges in May following his arrest last year.

From:On DarkNet – Dark Web News and Analysis
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