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China’s Crackdown on Cybercrimes
China’s highest prosecutorial authority is intensifying efforts to combat the growing wave of cybercrimes by targeting criminals who exploit blockchain and metaverse projects for illegal activities.
Increased Cybercrimes on Blockchain and Metaverse
The Supreme People’s Procuratorate (SPP) expressed concern over the surge in online fraud, cyber violence, and personal information infringement. There has been a significant increase in cybercrimes committed on blockchains and within the metaverse, with criminals increasingly using cryptocurrencies for money laundering, making it challenging to trace their illicit wealth.
Rise in Charges Related to Cybercrimes
Ge Xiaoyan, deputy prosecutor-general of the SPP, revealed that charges related to cybercrime and telecom fraud have risen by 64% year-on-year. Alongside the rise in blockchain-related crimes, traditional crimes such as gambling, theft, pyramid schemes, and counterfeiting have also expanded into cyberspace.
Heightened Vigilance and Crackdown
Zhang Xiaojin, director of the Fourth Procuratorate of the SPP, warned citizens and participants in the digital asset space regarding investment scams in the local crypto economy. He specifically pointed out the rise of new cybercrimes utilizing the metaverse, blockchain, and binary options platforms, emphasizing the need for heightened vigilance.
Regulatory Efforts and Approach
China’s approach to cracking down on digital asset-related crimes differs from that of Hong Kong, with the People’s Bank of China (PBoC) addressing issues related to cryptocurrency regulation and decentralized finance. The Chinese central bank emphasized the need for joint efforts by different countries to regulate the industry effectively.
Revised Anti-Money Laundering Law
China is set to revise its outdated Anti-Money-Laundering (AML) law in a bid to tackle the increasing risks associated with virtual assets. Legal scholars have indicated that its primary objective is to combat money laundering involving virtual assets.
Urgency to Address Money Laundering
As reported by Chinese digital news media Jiemian, there is an urgency to address money laundering related to virtual assets, with the proposed amendment to undergo review by the national legislature.