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Chinese Prosecutors Commit to Stricter Penalties for Offenses Related to Blockchain and the Metaverse
Criminals involved in illegal activities utilizing blockchain technology and metaverse initiatives will encounter heightened consequences, stated China’s top prosecutor today.
During a press briefing conducted by the Supreme People’s Procuratorate of China on February 23, spokesperson Li Xuehui emphasized a rise in cybercrime associated with blockchains and the metaverse.
Chinese Prosecutors Emphasize Rising Crypto Fraud
Li pointed out that cryptocurrency money laundering has swiftly transformed into a common channel for unlawful wealth and criminal endeavors.
“Moving forward, the procuratorial bodies will diligently execute the directives of the 20th National Congress of the Communist Party of China, strategize and advance the legal internet work of procuratorial entities from a higher perspective, and offer robust judicial support for fostering a positive internet environment,” Li remarked during the press briefing.
Zhang Xiaojin, the Director of the Fourth Procuratorate of the Supreme People’s Procuratorate, cautioned the public regarding the widespread occurrence of “high yield, low risk” investment frauds within China’s local cryptocurrency market. The Chinese prosecutor urged individuals to remain alert and adjust to changing criminal tactics, citing the pig butchering scheme as one of the most notable scams.
The pig butchering scheme entails forming a relationship with a victim, convincing them to invest in a fraudulent digital asset venture or exchange, and then disappearing with their funds. U.S. authorities successfully confiscated over $9 million in Tether’s USDT stablecoin last year related to a pig butchering scam.
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China and Cryptocurrency
In the previous year, Chinese authorities prosecuted more than 42,000 individuals involved in electronic fraud and cryptocurrency scams.
Crypto trading and mining have been banned in China since 2021. Nevertheless, the nation has made progress in central bank digital currencies (CBDCs) and regulatory frameworks concerning Web3 technologies.
China’s recent crackdown on individuals operating blockchain and metaverse scams corresponds with a rise in illegal cryptocurrency activities in Hong Kong. According to Hong Kong’s Financial Services and Treasury, crypto-related offenses in the special administrative region have nearly tripled since 2021.
Hong Kong has recently enacted crypto-friendly regulations aimed at standardizing its local digital asset landscape and protecting investors. The region has introduced a licensing framework for compliant enterprises and has even suggested the potential for spot Bitcoin ETFs to be traded on local exchanges following the approval of 11 issuers by the U.S. Securities and Exchange Commission.
As the transitional phase for the #VirtualAsset Service Providers licensing system approaches its conclusion, we are progressively enhancing regulations on virtual assets to support market growth #ChristopherHui https://t.co/SZCYooCwWK
— Hong Kong SAR Government News (@newsgovhk) February 2, 2024
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