Recent developments in China indicate that cryptocurrencies are still being used despite the government’s ban. Chinese police have conducted multiple raids, uncovering illicit transactions worth billions of dollars involving cryptocurrencies.
According to a Bloomberg report, in May, Chinese authorities discovered an underground bank involved in illegal transfers amounting to 13.8 billion yuan ($1.9 billion). They also identified a gang responsible for unauthorized conversions worth about 2 billion yuan and several unlawful money exchanges totaling over 1 billion yuan.
These findings suggest that Chinese traders are significantly active in the cryptocurrency market. The police located suspects in various regions, including Beijing, Jilin province in the northeast, and Chengdu City in the southwest, indicating that such practices might be widespread across the country.
Despite the two-year ban on cryptocurrency transactions imposed by Chinese authorities due to concerns over money laundering, currency outflows, and environmental damage from Bitcoin mining, Chinese citizens appear to remain engaged with digital assets. Many use cryptocurrencies as alternative investments amid declining property prices, while others employ them to circumvent overseas transfer limits.
Chengyi Ong, APAC policy head at Chainalysis Inc., noted that a significant amount of crypto activity persists in China. This may be due to a lack of strict enforcement of the ban and the decentralized, peer-to-peer nature of crypto activities.
Chainalysis reported that approximately $86 billion in crypto flowed into China in the 12 months through June 2023. Although this volume is substantial, it has significantly decreased from pre-ban levels.
May 2024, Cryptoniteuae
