Chinese Police Seize $160 Million in Crypto

According to a report on the website toutiao.com, an investigation by Chinese police has uncovered a large-scale cross-border online gambling case with a turnover of 400 billion yuan (approximately $56 billion), with cryptocurrency at the heart of the operation. 

Qiu Moumou—the alleged mastermind and main suspect—now faces trial after a two-year effort by authorities. Gambling has been illegal in the People’s Republic of China since 1949.

A Landmark Crypto Case in China

The case came to light when Xiong Xong, a citizen from Shayang County, Hubei Province, reported his involvement in mobile phone gambling to the Jishan police station on July 28, 2021. What began as innocent mobile gaming took a dark turn as Xiong witnessed his colleagues amassing significant sums of money. 

Intrigued, he downloaded the game app and started winning thousands of yuan. However, his fortunes reversed as his bets increased, resulting in losses exceeding 100,000 yuan ($14,000 USD).

Following an extensive investigation, Chinese authorities reportedly discovered a massive international crime ring that used cryptocurrency to mask its activity. According to local accounts, this made it extremely difficult for authorities to trace the source of funds and understand the full scale of the operation.

However, a breakthrough then led to arrests in several provinces, resulting in the dismantling of 14 alleged gangs, the apprehension of over 130 suspects, and the confiscation of computers, mobile phones, and bank cards.

During their efforts, the police seized over $160 million USD in cryptocurrency. Local police have called it the “first case of virtual currency” retrieval in the country. The case is being reported as a landmark one for the use of digital assets to facilitate crime.

China Banned All Crypto Transactions in 2021

In September 2021, China declared all cryptocurrency trading illegal. Although the country had initially banned it in 2019, trading persisted through foreign exchanges. 

That hasn’t stopped millions of Chinese from continuing to use cryptocurrency, however. Recently, the world’s most populous country has hinted at softening its stance.

Since the mainland ban, Hong Kong, a special administrative region of China, has adopted a contrasting approach by taking steps to establish itself as a digital asset hub.

So far, investors and businesses have been cautious in their entry into the city-region. Chinese authorities are well known for taking sudden, repressive measures against industries that displease the Communist Party.