Police in China arrested over 1,100 people suspected of using cryptocurrencies to launder illegal proceeds from phone and internet fraud in a recent raid, the public security ministry said.

The arrests came as Chinese authorities stepped up crackdown on cryptocurrency trading. Last month, three industry bodies banned crypto-related financial and payment services, and the State Council, China’s cabinet, pledged to crack down on bitcoin mining and trading. Continue reading

The Ministry of Public Security said the police had arrested more than 170 criminal groups using cryptocurrencies for money laundering by Wednesday afternoon.

The money launderers charged their criminal customers a commission of 1.5% to 5% to convert illegal income into virtual currencies via crypto exchanges, the ministry said via its official Wechat account.

China’s Payment & Clearing Association said Wednesday that the number of crimes related to the use of virtual currencies is increasing.

Since cryptocurrencies are anonymous, convenient and global, “they are increasingly becoming an important channel for cross-border money laundering,” said a statement from the association.

Cryptocurrencies have already become a popular means of payment for illegal gambling activities. Almost 13% of gambling sites support the use of virtual currency, and blockchain technology has made it difficult for authorities to track the money, the association said.

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