Still ‘top ranked’ for illicit exercise however crime is falling
A brand new report from Chainalysis has discovered that whereas China’s share of worldwide prison crypto flows has been falling for the reason that third quarter of 2019, the nation nonetheless represents a disproportionate amount of cash laundering and rip-off exercise.
In its August 3 Cryptocurrency and China report, Chainalysis acknowledged that greater than $2.2 billion value of crypto had been despatched from Chinese wallets to addresses related to illicit exercise between April 2019 and June 2021.
Chinese addresses additionally obtained greater than $2 billion value of digital belongings tied to nefarious exercise equivalent to scams and darknet marketplaces. Despite this, the report says crime has fallen considerably:
“China’s transaction volume with illicit addresses has fallen drastically over the time period studied, both in terms of raw value and in relation to other countries. Much of the drop is due to the absence of large-scale Ponzi schemes like the 2019 PlusToken scam.”
Chainalysis added that, “While China remains one of the top-ranked countries for illicit transaction volume, it used to beat all others by a wide margin, suggesting that cryptocurrency-related crime in the country has fallen.”
The report’s authors cite “historical transaction data” as suggesting that Chinese over-the-counter (OTC) Bitcoin brokers “have played an outsized role in facilitating money laundering for those involved in cryptocurrency-based crime.”
The report provides that the “vast majority” of illicit Chinese crypto flows have been related to rip-off exercise, though digital asset-based cash laundering remains to be “disproportionately carried out in China.”
Chainalysis famous that China’s central authorities performed greater than 1,100 arrests related to digital asset-based cash laundering in June, indicating a willingness to crack down on the sector.
“It will be interesting to see whether the arrests lead to a drop in flows of illicit funds to China-based cryptocurrency businesses and OTC traders.”
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However, Chainalysis speculates that China’s growing strikes to clamp down on conventional decentralized cryptocurrencies could undermine the nation’s standing as a world crypto superpower shifting ahead.
The report attributes China’s renewed hostility towards decentralized crypto belongings to its plans for widespread adoption of the digital yuan.