How the Chinese government is fighting crypto-fraudsters: Measures and strategies
In recent years, China has faced rapid development of the cryptocurrency market, which attracted not only investors and entrepreneurs, but also fraudsters. In response to the threat posed by crypto fraud, the Chinese government has developed a number of measures and initiatives to protect users and control cryptocurrency operations. In this article, we look at how Chinese authorities are dealing with cryptocurrency scammers and what steps are being taken to keep investors safe and stabilize the market.
1. Legislative action against crypto fraud in China
1.1. Use of cryptocurrencies for payments banned
One of China's biggest legislative initiatives has been banning the use of cryptocurrencies as a means of payment. In 2017, the Central Bank of China (PBOC) issued an executive order banning financial institutions and companies from providing cryptocurrency-related services. This included a ban on processing payments in cryptocurrency, as well as the use of cryptocurrency exchanges as platforms for conducting transactions.
The aim of the measure was to prevent cryptocurrencies from being used for illegal transactions such as money laundering and terrorist financing, and to limit the ability of crypto fraudsters to conduct their schemes through anonymous transactions.
1.2. Tightening legislation to combat crypto fraudsters
In response to the rise in cryptocurrency-related fraud, the Chinese government has stepped up scrutiny of decentralized financial projects (DeFi) and other cryptocurrency activities. In 2021, the country's authorities began to more actively suppress the work of cryptocurrency mining farms and block access to platforms using cryptocurrencies in their schemes.
In addition, in recent years, many bills have been initiated aimed at toughening penalties for participation in cryptocurrency Ponzi schemes and other forms of fraud. Persons organizing or participating in crypto fraud may be subject to fines and criminal prosecution.
1.3. Regulation of ICOs and cryptocurrency startups
Crypto launch or ICO (Initial Coin Offerings) start-ups are also under close scrutiny. In China, strict regulation of ICOs was introduced, which made these projects illegal in the country. All initiatives to raise funds through cryptocurrency startups must be registered and comply with local legislative requirements. Chinese authorities are actively testing ICO platforms and projects for fraud to prevent investors from being deceived.
2. Active fight against crypto-fraudsters: Actions of the authorities and law enforcement agencies
2.1. Large-scale arrests and investigations
To combat cryptocurrency fraud, the Chinese government is actively using law enforcement agencies that conduct large-scale investigations and arrests against cryptocurrency fraudsters. In 2020, scores of people involved in financial pyramids and cryptocurrency schemes that cheated thousands of Chinese investors were arrested.
An example is the arrest of the organizers of the PlusToken scheme, which attracted the attention of the authorities after it turned out that fraudsters stole more than $5 billion in cryptocurrencies. The case was an example of the Chinese government effectively dealing with major cryptocurrency scams and actively cracking down on illegal transactions.
2.2. Stopping the work of fake cryptocurrency exchanges
China has seen an active crackdown on the activities of fake cryptocurrency exchanges, which provide trading platforms for users but are actually tools for stealing funds. Fraudsters often create fake exchanges, offering investors attractive terms for trading cryptocurrencies, but then steal users' funds.
Law enforcement agencies conduct regular investigations in order to identify such exchanges and liquidate them. In 2020, Chinese authorities blocked access to more than 20 cryptocurrency exchanges that operated without a license or in violation of the law.
2.3. Blocking fraudulent online platforms and apps
In addition, Chinese authorities are actively blocking access to fraudulent mobile apps and websites that offer investments in cryptocurrencies or other digital assets, but in reality are part of a deception scheme. In 2021, many such applications and sites were closed, which helped significantly reduce the number of cases of fraud in the field of cryptocurrencies.
3. Education and prevention: How the Chinese government informs the population
3.1. Raising awareness of cryptocurrency risks
One of the key strategies to combat cryptocurrency fraudsters is educational work among the population. Chinese authorities actively inform citizens about the risks associated with investing in cryptocurrencies through various state channels such as media, internet platforms and public organizations.
The Chinese government is campaigning to educate investors and warns of the possible risks of participating in Ponzi schemes, fake ICOs and other types of crypto fraud.
3.2. Cooperation with international organizations
China also actively cooperates with international organizations such as Interpol and FATF (Financial Action Task Force) to combat transnational cryptocurrency fraud. This collaboration makes it possible to effectively identify and arrest fraudsters, as well as block international cryptocurrency channels used for money laundering and financial deception.
4. Conclusion
The Chinese government is taking serious action to crack down on cryptocurrency fraudsters, and the results of that effort are becoming increasingly clear. Regulation, clampdown on fraudulent platforms and active investigation of large cheating schemes help reduce risks to investors. Despite the difficulties associated with the rapid development of the cryptocurrency market, the Chinese authorities are doing everything possible to protect the population from financial losses and ensure the stability of the cryptocurrency sector in the country.
In recent years, China has faced rapid development of the cryptocurrency market, which attracted not only investors and entrepreneurs, but also fraudsters. In response to the threat posed by crypto fraud, the Chinese government has developed a number of measures and initiatives to protect users and control cryptocurrency operations. In this article, we look at how Chinese authorities are dealing with cryptocurrency scammers and what steps are being taken to keep investors safe and stabilize the market.
1. Legislative action against crypto fraud in China
1.1. Use of cryptocurrencies for payments banned
One of China's biggest legislative initiatives has been banning the use of cryptocurrencies as a means of payment. In 2017, the Central Bank of China (PBOC) issued an executive order banning financial institutions and companies from providing cryptocurrency-related services. This included a ban on processing payments in cryptocurrency, as well as the use of cryptocurrency exchanges as platforms for conducting transactions.
The aim of the measure was to prevent cryptocurrencies from being used for illegal transactions such as money laundering and terrorist financing, and to limit the ability of crypto fraudsters to conduct their schemes through anonymous transactions.
1.2. Tightening legislation to combat crypto fraudsters
In response to the rise in cryptocurrency-related fraud, the Chinese government has stepped up scrutiny of decentralized financial projects (DeFi) and other cryptocurrency activities. In 2021, the country's authorities began to more actively suppress the work of cryptocurrency mining farms and block access to platforms using cryptocurrencies in their schemes.
In addition, in recent years, many bills have been initiated aimed at toughening penalties for participation in cryptocurrency Ponzi schemes and other forms of fraud. Persons organizing or participating in crypto fraud may be subject to fines and criminal prosecution.
1.3. Regulation of ICOs and cryptocurrency startups
Crypto launch or ICO (Initial Coin Offerings) start-ups are also under close scrutiny. In China, strict regulation of ICOs was introduced, which made these projects illegal in the country. All initiatives to raise funds through cryptocurrency startups must be registered and comply with local legislative requirements. Chinese authorities are actively testing ICO platforms and projects for fraud to prevent investors from being deceived.
2. Active fight against crypto-fraudsters: Actions of the authorities and law enforcement agencies
2.1. Large-scale arrests and investigations
To combat cryptocurrency fraud, the Chinese government is actively using law enforcement agencies that conduct large-scale investigations and arrests against cryptocurrency fraudsters. In 2020, scores of people involved in financial pyramids and cryptocurrency schemes that cheated thousands of Chinese investors were arrested.
An example is the arrest of the organizers of the PlusToken scheme, which attracted the attention of the authorities after it turned out that fraudsters stole more than $5 billion in cryptocurrencies. The case was an example of the Chinese government effectively dealing with major cryptocurrency scams and actively cracking down on illegal transactions.
2.2. Stopping the work of fake cryptocurrency exchanges
China has seen an active crackdown on the activities of fake cryptocurrency exchanges, which provide trading platforms for users but are actually tools for stealing funds. Fraudsters often create fake exchanges, offering investors attractive terms for trading cryptocurrencies, but then steal users' funds.
Law enforcement agencies conduct regular investigations in order to identify such exchanges and liquidate them. In 2020, Chinese authorities blocked access to more than 20 cryptocurrency exchanges that operated without a license or in violation of the law.
2.3. Blocking fraudulent online platforms and apps
In addition, Chinese authorities are actively blocking access to fraudulent mobile apps and websites that offer investments in cryptocurrencies or other digital assets, but in reality are part of a deception scheme. In 2021, many such applications and sites were closed, which helped significantly reduce the number of cases of fraud in the field of cryptocurrencies.
3. Education and prevention: How the Chinese government informs the population
3.1. Raising awareness of cryptocurrency risks
One of the key strategies to combat cryptocurrency fraudsters is educational work among the population. Chinese authorities actively inform citizens about the risks associated with investing in cryptocurrencies through various state channels such as media, internet platforms and public organizations.
The Chinese government is campaigning to educate investors and warns of the possible risks of participating in Ponzi schemes, fake ICOs and other types of crypto fraud.
3.2. Cooperation with international organizations
China also actively cooperates with international organizations such as Interpol and FATF (Financial Action Task Force) to combat transnational cryptocurrency fraud. This collaboration makes it possible to effectively identify and arrest fraudsters, as well as block international cryptocurrency channels used for money laundering and financial deception.
4. Conclusion
The Chinese government is taking serious action to crack down on cryptocurrency fraudsters, and the results of that effort are becoming increasingly clear. Regulation, clampdown on fraudulent platforms and active investigation of large cheating schemes help reduce risks to investors. Despite the difficulties associated with the rapid development of the cryptocurrency market, the Chinese authorities are doing everything possible to protect the population from financial losses and ensure the stability of the cryptocurrency sector in the country.