Beijing, February 26, 2024 – China is bolstering efforts to combat the growing use of cryptocurrencies for cybercrimes. The country’s Supreme People’s Procuratorate (SPP) announced it is prioritizing the prosecution of criminals who leverage blockchain platforms and metaverse environments to conduct illegal activities.
According to the SPP, cyber offenses involving the use of digital assets have risen sharply. Criminals are exploiting the pseudo-anonymous nature of cryptocurrencies to obscure the origins of illicit funds and evade law enforcement.
“We have seen an explosion in crimes such as online fraud, theft, gambling, and money laundering tied to cryptocurrency use,” said SPP deputy prosecutor-general Wu Chen. “These virtual assets enable nefarious activities and make it extremely difficult for prosecutors to trace the flow of dirty money.”
The SPP highlighted prolific growth in the creation of Ponzi schemes and investment scams conducted in metaverse virtual worlds. Victims lured into transferring funds to digital wallets controlled by criminals are nearly impossible to recover.
China’s central bank, the People’s Bank of China (PBoC), echoed concerns about cryptocurrencies in its latest financial stability report. The PBoC emphasized the need for unified global regulations to govern cryptocurrency markets and activities.
Beijing banned domestic cryptocurrency trading in 2021 and recently conducted sweeping shutdowns of crypto mining operations. But PBoC governor Yi Gang acknowledged that “no country can eradicate crypto activity within its borders.”
“We must remain vigilant against unlawful elements that will seek to abuse cryptocurrencies regardless of prohibitions,” said Gang. “Law enforcement needs advanced tools and cooperation across agencies and nations to protect the integrity of the financial system.”
The SPP stated it is actively modernizing capabilities to prosecute cybercrimes enabled by new financial technologies. But procurator-general Zhao Lei admitted, “the Justice system is lagging behind the pace of crypto innovation.”
“Criminals adapt rapidly to new technologies, so prosecutors must work swiftly to master emerging digital environments and close loopholes before they are exploited,” Lei said. The SPP’s enforcement actions represent China’s toughened stance against the criminal misuse of digital assets.
