Chinese officials have cracked down on a criminal group connected to a money laundering charge.
The group scammed a person for 200,000 yuan (about $32,000) and used a digital yuan wallet to launder the funds.
11 individuals tied to the incident were detained and will now face a criminal trial.
Share this article
Chinese officials have detained 11 suspects in the first-ever money laundering case involving its central bank digital currency (CBDC).
11 Arrested For Illicit Use of Digital Yuan
Chinese investigators have reported an alleged money laundering scheme involving digital yuan, the country’s CBDC, which was introduced last year.
Chinese officials have cracked down on an unnamed group of individuals who allegedly used digital yuan, also called e-CNY, to launder funds acquired in a scam, according to digital media outlet Jiemian.
According to officials at Xinmi Public Security Bureau, the group first allegedly defrauded a person located in Xinmi province for 200,000 yuan (about $32,000) by leveraging a tech support scam. The group then used a digital yuan wallet to launder the funds and funnel it out of the country, investigators found.
The officials later pinned down a 26-year-old female suspect in Fujian province. In a follow-up investigation, 11 individuals tied to the incident were detained and will face a criminal trial.
Based on their investigation, officials allege the group used the digital yuan service to launder funds by routing the funds to an overseas fraud group hiding in Cambodia. According to the officials, the group tried to leverage the newly-introduced CBDC wallets to evade getting caught.
Even though the use of cryptocurrency is banned in China, the digital yuan is now accepted across major Chinese cities. As of Oct. 2021, roughly 140 million people in China had signed up to open digital yuan wallets.
Rather than using blockchain, the digital yuan relies on digital signatures and encrypted storage for transactional security and to prevent double-spending. As the CBDC can be exchanged privately and in a peer-to-peer manner, it has the potential to be used in financial crime, just like physical cash.
The Chinese central bank has repeatedly expressed concerns about the use of digital assets and stablecoins for illicit activities like money laundering. In a June 2021 incident, the country’s officials arrested over 1,100 suspects for crypto-related money laundering.
Furthermore, given that Chinese authorities can presumably analyze the flow of its CBDC using data analytics, the digital yuan’s effectiveness as an instrument for money laundering may be quite limited.
This news was brought to you by Phemex, our preferred Derivatives Partner.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
After the World’s First CBDC, China Now Wants to Build a Blockch…
In a 145-page document, the Beijing municipal administration presented a two-year roadmap for a blockchain-based programmable governance model. More than 100 government services in China are already using blockchain technology….
How Bumper’s Price Protection Helps DeFi Users Earn Yield on Their A…
Is it possible to build a DeFi protocol that counters crypto’s inherent volatility while also letting holders enjoy the upshot of their assets? Bumper Finance is a DeFi price-protection protocol that aims…
Nigeria Rolls Out Africa’s First CBDC
Nigeria has become the first African nation to introduce a central bank digital currency (CBDC). It joins China and the Bahamas as early pioneers of official CBDCs. eNaira Introduced in…
Binance Halts Yuan Trading After China’s Crypto Ban
Binance, the largest global cryptocurrency exchange, is shutting down peer-to-peer trading of the yuan in response to China’s Sep. 24 blanket crypto ban. Binance Removes Chinese Yuan From Peer-to-Peer Platform…