China’s authorities set to intensify efforts against increasing blockchain and metaverse crime
China’s Supreme People’s Procuratorate has announced that it will take action against criminals who exploit blockchain technology and metaverse projects for illegal activities. Li Xuehui, a spokesperson for the Supreme People’s Procuratorate, highlighted the rise of cybercrime on blockchains and in the metaverse during a press conference on February 23. Xuehui stated that cryptocurrency money laundering has become a popular method for criminals to accumulate illicit wealth. Zhang Xiaojin, the Director of the Fourth Procuratorate of the Supreme People’s Procuratorate, warned against investment scams that promise high returns with low risks in the local crypto economy. He urged citizens and digital asset participants to be aware of evolving criminal tactics, such as the “pig butchering” scheme. Pig butchering involves luring victims to invest in fraudulent digital asset projects or exchanges and then disappearing with their money. Last year, US authorities seized over $9 million in Tether’s USDT stablecoin connected to this scam. In 2023, Chinese authorities prosecuted more than 42,000 individuals involved in electronic fraud and crypto-related scams. This crackdown on blockchain-related crimes in China coincides with a surge in illicit activities in Hong Kong. Crypto crime in the special administrative region has tripled since 2021. However, Hong Kong is also implementing crypto-friendly regulations to regulate its local digital asset ecosystem and protect investors while promoting innovation. The region has introduced a licensing system for compliant businesses and may allow spot Bitcoin ETFs to be traded on local exchanges. In contrast, China has banned crypto trading and mining since 2021, but has focused on developing central bank digital currencies (CBDCs) and web3 regulatory policies.
