Chinese law enforcement officials have detained 11 suspected money launderers using a central bank digital currency wallet.
The Xinmi City Public Security Service reported that recently, under the leadership and assistance of the Anti-Fraud Center and the Zhengzhou Public Security Bureau
identified a criminal group that used state digital currency to launder money.
During the operation in Fujian province in Xinmi city, 11 people were arrested for illegal use of state digital currency. In an attempt to hide their activities from the authorities, criminals used government digital wallets. Fraudsters, using social technologies, lured significant amounts of money from victims and disappeared with them. One of the victims of the fraud contacted law enforcement and reported the theft of 200,000 yuan (about $ 32,000), which she transferred to the attacker’s electronic wallet.
During the investigation, law enforcement agencies managed to reach a 26-year-old resident of Fuzhou in Fujian province. The fraudster converted the stolen money into the state digital currency using a digital wallet and took it out of the country.
The police identified 10 more suspects who acted in the same way and went to a criminal group in Cambodia. The public security service said it was an “unfamiliar battleground” because government digital currency is a new payment method that differs from online banking via Alipay, or WeChat.
Law enforcement agencies admitted that although the state digital currency was intended to combat money laundering, terrorist financing and suppression of other criminal activities, it has not yet been able to solve these problems.
China is speeding up testing of its state digital currency to launch by the 2022 Olympics. Two months ago, a full-scale test of the state digital currency began in the city of Sinai with 6 million inhabitants. In August, Chinese banks began exploring the potential of the state digital currency for insurance and investment. In the same month, China announced that it intends to launch an international settlement network for mobile payments in state digital currency.
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