China Intensifies Efforts Against Cybercrime
China’s Supreme People’s Procuratorate has announced plans to intensify efforts against cybercriminals exploiting blockchain technology and metaverse projects for illegal activities. During a press conference on February 23, spokesperson Li Xuehui highlighted a worrying increase in cybercrime linked to these digital domains. Cryptocurrency money laundering, in particular, has emerged as a primary method for transferring illicit wealth, necessitating a robust response from authorities.
Investment Scams and the Rise of “Pig Butchering”
Zhang Xiaojin, Director of the Fourth Procuratorate, warned the public about the dangers of falling for “high yield, low risk” investment scams that have become prevalent within the local cryptocurrency economy. A notable strategy employed by scammers is “pig butchering,” a scheme that involves building trust with a victim, persuading them to invest in a fraudulent digital asset project or exchange, and then absconding with their funds. In a notable crackdown, U.S. authorities confiscated over $9 million in Tether’s USDT stablecoin last year, linked to such a scam.
A Comprehensive Approach to Cybersecurity
In 2023, over 42,000 individuals were prosecuted for involvement in electronic fraud and crypto-related scams, underscoring the scale of the challenge faced by Chinese law enforcement. Moving forward, the procuratorial organs are set to implement the directives of the 20th National Congress of the Communist Party of China, aiming to elevate the Internet legal work of procuratorial organs. This initiative is part of a broader strategy to foster a healthier Internet ecosystem and provide a strong judicial guarantee against cybercrime.
Hong Kong’s Regulatory Response to Crypto Crime
The crackdown is timely, as crypto crime in Hong Kong, a special administrative region of China, has seen a significant increase, with illicit activities tripling since 2021. In contrast to mainland China’s prohibition on crypto trading and mining, Hong Kong is taking steps to foster a crypto-friendly environment. This includes the introduction of a licensing regime for crypto businesses and the potential for trading spot Bitcoin ETFs on local exchanges, following the U.S. SEC’s approval of 11 issuers. These measures aim to standardize the digital asset ecosystem and ensure investor protection while encouraging innovation.
