Between April 2019 and June 2021, more than $ 2.2 billion in cryptoassets were sent to Chinese cryptocurrency addresses linked to illegal activities, according to Chainalysis.
According to a report by analytical company Chainalysis, China continues to lead in terms of the number of cryptocurrency users, behind the United States. During this period, more than $ 2.2 billion of cryptocurrencies were sent to Chinese addresses related to cryptocurrency fraud and transactions on the darknet market. assets.
Analysts specifically mentioned fentanyl trafficking by Chinese manufacturers, many of whom sold it for cryptocurrencies. In August 2019, the Office of Foreign Assets Control (OFAC) imposed sanctions against Fujing Zheng, who led the Zheng Drug Trafficking Organization for shipping fentanyl to the United States. Zheng used bitcoin to launder criminal proceeds. Analysts at Chainalysis found that about $ 23,000 in BTC was received at its Bitcoin address.
However, over the past two years, the volume of transactions in China with addresses convicted of using “dirty” cryptocurrencies has dropped sharply. This is mainly due to the closure of large cryptocurrency pyramids such as PlusToken aimed at Asian users. The total damage from the PlusToken pyramid is estimated at about $ 7.6 billion. The report indicates that in most cases, money laundering using cryptocurrencies took place using over-the-counter (OTC) platforms.
The activities of such platforms in China are strictly suppressed. In June, Chinese authorities arrested more than 1,100 digital asset money laundering suspects. The arrests may be related to the country’s cryptocurrency bans, but analysts are wondering if such measures will help reduce the flow of illicit funds to Chinese cryptocurrency organizations and OTCs.
In addition, analysts noted that after the mining ban in China, the dominance of this country in the cryptocurrency market continues to weaken. However, according to the Cambridge Center for Alternative Finance (CCAF), the share of Chinese miners in the total Bitcoin hashrate has been steadily declining even before the prohibitive measures introduced by the Chinese authorities.
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