A huge virtual currency money laundering case involving 40 billion yuan was cracked

Another virtual currency transaction money laundering case was cracked, and the amount involved was as high as 40 billion yuan!

On September 26, the public security department of Hengyang County, Hunan Province announced that it had cracked the "9.15" major money laundering criminal group case. In this case, the criminal gang was suspected of using virtual currency transactions to launder money with the amount reaching 40 billion yuan. Currently, more than 300 cases involving telecommunications fraud have been linked together.

my country has cracked down on many virtual currency money laundering cases

According to information disclosed by the Hengyang County Public Security Bureau in Hunan Province, the "2021.9.15" task force started with the case of Liu being defrauded of 7.8 million yuan, conducted in-depth analysis and meticulous investigation, and carried out multiple rounds of operations in Hainan, Guangdong, Fujian, Jiangxi and other places in December 2021 and July 2022, respectively. The entire chain smashed the money laundering criminal group headed by Hong Moumou, arrested 93 criminal suspects, smashed more than 10 money laundering and running dens, seized more than 100 mobile phones and computers involved in the case, and sealed and frozen 300 million yuan of funds involved in the case, recovering 7.8 million yuan in economic losses for the victims.

After investigation, it was found that since 2018, the criminal gang headed by the suspect Hong Moumou has contacted collection and payment points in many cities in China, converted the funds involved in fraud and gambling into virtual currency and then cashed them into US dollars for laundering, and finally used multiple domestic companies to illegally remit the funds to other financiers, thereby gaining illegal profits. The criminal group used virtual currency transactions to launder money up to 40 billion yuan.

At present, criminal coercive measures have been taken against 93 suspects including Hong Moumou in accordance with the law, and the case is under further investigation.

In recent years, my country has cracked down on a number of virtual currency money laundering cases: the Public Security Bureau of Haixi Prefecture in Qinghai Province cracked down on a criminal gang that used virtual currency to "run points" to launder money, with the funds involved reaching more than 50 million yuan; the Rare Earth High-tech Zone Public Security Bureau of the Baotou City Public Security Bureau in Inner Mongolia Autonomous Region cracked down on a virtual currency money laundering case, with the funds involved reaching more than 80 million yuan...

According to the information released by the Ministry of Public Security, in 2021, public security organs across the country cracked 259 related cases targeting new channels for money laundering using virtual currency, and confiscated virtual currency worth more than 11 billion yuan.

In April this year, Liu Zhongyi, director of the Criminal Investigation Bureau of the Ministry of Public Security, said at a press conference of the State Council Information Office that with the continuous deepening of the crackdown and governance work, some new changes and new characteristics have emerged in telecommunications network fraud crimes. Among them, from the perspective of funding channels, the proportion of money laundering through traditional third-party payment and public accounts has decreased, and a large number of money laundering using running points platforms and digital currencies, especially using USDT (Tether), is the most serious.

Continue to crack down on domestic virtual currency trading speculation

On the evening of September 26, the People's Bank of China issued a document stating that it will continue to crack down on domestic virtual currency trading speculation, and the proportion of Bitcoin trading in China in the world has dropped significantly. It will severely crack down on illegal fundraising, and has filed and investigated 25,000 illegal fundraising cases in the past five years.

Virtual currency trading speculation disrupts the economic and financial order and breeds illegal and criminal activities such as gambling, illegal fund-raising, fraud, pyramid schemes, and money laundering. Over the years, my country has continued to intensify its crackdown.

In September 2021, the People's Bank of China issued the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Transaction Speculation", which comprehensively prohibits services related to virtual currency settlement and the provision of trader information. Those engaged in illegal financial activities will be held criminally liable.

The Notice reiterates that virtual currency-related business activities are illegal financial activities. Virtual currency-related business activities such as the exchange of legal currency and virtual currency, the exchange of virtual currencies, the purchase and sale of virtual currency as a central counterparty, the provision of information intermediary and pricing services for virtual currency transactions, token issuance financing, and virtual currency derivatives transactions are suspected of illegal financial activities such as illegal sale of token tickets, unauthorized public issuance of securities, illegal operation of futures business, and illegal fundraising. All of them are strictly prohibited and resolutely banned in accordance with the law. Those who engage in related illegal financial activities that constitute a crime shall be held criminally liable in accordance with the law.

The "Notice" emphasizes that financial institutions and non-bank payment institutions shall not provide services such as account opening, fund transfer, and clearing and settlement for virtual currency-related business activities, shall not include virtual currency in the scope of collateral, shall not carry out insurance business related to virtual currency or include virtual currency in the scope of insurance liability, and any clues of illegal and irregular problems shall be reported to the relevant departments in a timely manner.

At the same time, there are legal risks in participating in virtual currency investment and trading activities. Any legal person, non-legal person organization or natural person who invests in virtual currency and related derivatives and violates public order and good morals will have their relevant civil acts invalidated and will be responsible for the losses caused by them. If they are suspected of disrupting financial order and endangering financial security, they will be investigated and dealt with by relevant departments in accordance with the law.

Before the release of the Notice, relevant departments of the People's Bank of China had interviewed some banks and third-party payment institutions regarding the issue of banks and payment institutions providing services for virtual currency trading speculation. Relevant departments of the People's Bank of China pointed out that virtual currency trading speculation disrupts the normal order of the economy and finance, breeds the risk of illegal cross-border transfer of assets, money laundering and other illegal and criminal activities, and seriously infringes on the property safety of the people. Banks and payment institutions shall not provide products or services such as account opening, registration, trading, clearing and settlement for related activities. All institutions should comprehensively investigate and identify the capital accounts of virtual currency exchanges and over-the-counter traders, and promptly cut off the transaction capital payment link; analyze the capital transaction characteristics of virtual currency trading speculation activities, increase technical investment, improve the abnormal transaction monitoring model, and effectively improve the monitoring and identification capabilities.

Overseas countries are also stepping up efforts to combat money laundering using virtual currencies

Not only our country, but many countries around the world are also cracking down on crimes such as money laundering using virtual currency.

In February, U.S. authorities arrested Morgan and her husband and co-defendant Ilya Lichtenstein, charging the couple with laundering billions of dollars from cryptocurrency trading platform Bitfinex.

In August this year, the Indian Enforcement Directorate said it had frozen 646.7 million rupees (54.84 million yuan) of bank assets of WazirX, India's largest cryptocurrency exchange. The Indian Enforcement Directorate found that WazirX exchange actively assisted about 16 financial technology companies in participating in money laundering activities by purchasing crypto assets.

In order to combat the use of virtual currency for money laundering, many countries have introduced or are planning to introduce relevant regulations.

On September 23, the UK introduced a new anti-money laundering bill aimed at giving law enforcement agencies greater powers to seize, freeze and recover cryptocurrencies used for money laundering, drugs and other criminal activities.

On September 16, the White House released a cryptocurrency regulatory framework, including how the financial services industry should develop to make cross-border transactions easier and how to combat fraud in digital assets.

The State Bank of Vietnam also stated in August this year that it will strengthen supervision of the virtual currency market to prevent money laundering risks, and is comprehensively studying whether to include virtual currency in the Anti-Money Laundering Law.