China Reports First CBDC Money Laundering Case - Bitxcon
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China Reports First CBDC Money Laundering Case
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China Reports First CBDC Money Laundering Case

The suspects used the Yuan digital wallet to hide the results of the official money laundering claim.

Important Takeaways

  • Chinese official has take action against the criminal organization that is link with a money-laundering saga.
  • The group swindled one person out of 200,000 yuan (about $22,000) and then used a digital Yuan wallet to conceal the money.
  • 11 people connect to the incident were take into custody and will awaiting criminal trial.

Chinese officials have arrested 11 suspects in the world’s first money-laundering investigation involving the central bank’s electronic money (CBDC).

11 Arrested for Unlawful Utilization of Digital Yuan

Chinese investigators identify an alleged scheme to launder money that involves digital yuan. Which is the nation’s CBDC that was launching in the last year.

Chinese officials have taken action against unidentified individuals who were allegedly using digital yuan. Also known as e-CNY to pay off money that was stolen in a scam according to the digital news outlet Jiemian.

According to officials from the Xinmi Public Security Bureau the group was first accused of defrauding an individual in Xinmi province. Which is worth around 200,000 Yuan (about $32,000) through a tech support fraud. The group then utilized an online yuan wallet in order to conceal the money and transfer them out from the country. Investigators discovered.

The authorities later arrested a woman aged 26 from Fujian province. Following an investigation, 11 people connected with the murder were arrested and will arraign in a criminal trial.

Based on their investigations. Authorities claim that the group utilized the service of digital yuan to launder money. Through the routing of money to an overseas fraud group that is hiding in Cambodia. According to officials, the group was able to exploit the new CBDC wallets in order to avoid arrest.

Even though using cryptocurrency is illegal in China. However, digital currency accepts in major Chinese cities. In the month of October. 2021, about 140 million citizens in China register to create digital wallets using yuan.

Instead of using the blockchain instead, the digital yuan rely on digital signatures as well as encrypted storage to ensure the security of transactions and to avoid double-spending. Because the CBDC can trade privately and through a peer-to-peer system. Has the potential to use to commit financial crimes similar to physical cash.

The Chinese central bank has frequently expressed concern about the use of stablecoins and digital assets to carry out illicit activities such as money laundering. In a case in June 2021 authorities in China arrested more than 1,100 suspects in connection with the laundering of money through cryptos.

In addition, since Chinese authorities could possibly study the circulation of their CBDC through data analysis, the digital yuan’s potential as a tool for laundering money could restrict.

Read Also : Can China be able to restore cryptocurrency? There’s still hope

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