China Identifies Use Of Cryptography In Drug Trafficking As A New Phenomenon

A new report has highlighted the Chinese government’s recognition of the new threat posed by cryptocurrencies to facilitate drug trafficking.

The 2021 report says the government has identified a shift in the flow of drug money from online bank transfers to cryptocurrencies as a new phenomenon, according to a Chinese media outlet. nncc626 announced June 23.

China, which has emerged as one of the top crypto-unfriendly nations, said drug traffickers are also mining in-game currency to facilitate illicit trade. Overall, authorities noted that drug trafficking was increasingly moving online, with perpetrators looking for ways to circumvent the system.

Advertising

“The drug market continues to expand online, with increased use of cash and drug distribution and person-to-person transaction models <...> Drug capital transfers are being expanded from online bank transfers to virtual currency and in-game currency; drug delivery is done through “bulk logistics and small deliveries,” the report said.

The crypto crackdown in China

The use of cryptocurrencies to facilitate drug trafficking likely acted as a catalyst for the Chinese government’s efforts to ban cryptocurrencies. Notably, in 2021, the state banned crypto-related activities, including mining and trading, citing that the sector posed a threat to financial stability.

Most smugglers are attracted to cryptocurrencies mainly because of the anonymous nature which minimizes the chances of getting caught.

Despite increased government crackdowns, a previous report found that Chinese cryptocurrency addresses traded more than $2.2 billion worth of cryptocurrency to addresses linked to illicit activity between April 2019 and June 2021.

Crypto is converted to fiat through decentralized exchanges

Acquired cryptocurrencies are converted into fiat primarily using decentralized exchanges. For example, Binance, the world’s leading crypto exchange, was allegedly used as an intermediary to launder over $2.3 billion in illicit money.

Prior to the crackdown, drug traffickers from other parts of the world reportedly worked with Chinese money launderers through cryptocurrencies to facilitate the purchase of drug-making chemicals.

As Finbold reported, drug traffickers are increasingly adopting new cryptocurrencies to facilitate vices like drug trafficking. In this case, the meme cryptocurrency Dogecoin emerges as an alternative to Bitcoin and the privacy-centric token Monero.

We want to say thanks to the writer of this article for this outstanding material

China Identifies Use Of Cryptography In Drug Trafficking As A New Phenomenon


Check out our social media profiles as well as other related pageshttps://metfabtech.com/related-pages/