Police at Horqin Branch of Tongliao Public Security Bureau first noticed the gang after the Public Security Department of Inner Mongolia Autonomous Region discovered an unusual money flow from construction firm Shi Mouyuan. Further investigation showed that this gang spread across a number of provinces and cities, some members have even been arrested in Thailand.
It took the task force of 230 police officers three months to carry out an investigation that spanned 17 provinces, cities and autonomous regions before they were able to arrest 63 suspects, including leaders Zhang and Ji. Authorities also revealed that the gang has been operating since May 2021 and illegally earned money through online pyramid schemes, fraud, gambling and other crime into virtual digital currency.
This is not the first time Chinese authorities have dismantled criminal gangs that launder money with cryptocurrencies. A few months ago, the Hengyang District Public Security Bureau arrested a gang that laundered 40 million yuan in cryptocurrency. The gang, which has been active since 2018, has been involved in more than 300 online scams. Even the director of the District Public Security Bureau, Liu Xialong was also the victim. There have been 93 suspects arrested in the case.
This shows the prevalence of crypto-related crimes in China and further reinforces the government’s anti-crypto stance. But the government crackdown has also failed to wipe out cryptocurrency usage or Bitcoin mining in the country. According to data from Chainalysis, the use of Bitcoin and other cryptocurrencies for criminal activities has decreased this year. Crypto-related illegal activities have dropped 15% since July 2022, and total scam revenue was down 65%.
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