Victor Ugochukwu · Oct 30, 2020 . 8min read
China’s Gambling Operators Employ Crypto to Move Funds Globally
The Ministry of Public Security China accuses gambling operators for collecting and transferring Crypto funds for illicit activities.
By Komal Joshi · Sep 27, 2020 . 6min read
Yesterday Liao Jinrong, the director-general of the International Cooperation Department under the Chinese Ministry of Public Security, said illegal gambling operators use cryptocurrencies to facilitate the transfer of at least 1 trillion yuan ($145.5 billion) worth of funds from China into foreign casinos, every year. The fact that these gambling gangs transferred funds in crypto made it difficult for investigators in China to trace the funds’ source, Jinrong said.
According to him, the Ministry worried that these gambling operators would combine with foreign powers against China. Thus, disrupting China’s economic security. The official did not reveal the type of crypto employed by these alleged operators in the report. They further stated that there are loopholes and gaps in the administration of payment service providers, third-party institutions, merchants, and e-commerce platforms.
SAFE Controls Cross border Gambling
Liao Jinrong elucidates that the lack of stringent inspections and investigations on the opening of payment services at banks is questionable. He also pointed to the inadequate supervision of suspicious transactions and risk control by payment service providers. Additionally, he said there is a collaboration between payment industry practitioners and criminal organizations because the business is so lucrative.
He further states that particular measures have boosted China’s crackdown efforts on fund outflows into cross-border gambling. The measures include raising the cost of opening payment accounts at non-financial institutions, identifying unusual transactions. It also includes requiring account holders to use their real names.
Gambling and casinos are illicit in mainland China. Additionally, in August, China’s exchange regulator, the State Administration of Foreign Exchange (SAFE), planned to oversee the foreign exchange market ultimately. SAFE also desired to control underground banks and cross-border gambling, which is a deemed criminal activity in China.
Recently, the People’s Bank of China (PBoC), the nation’s central bank, has commenced blacklisting accounts belonging to large crypto traders. It aims to battle money laundering. However, the recent struggles come in line with a more comprehensive purpose of alleviating and abolishing criminal earnings and transactions.
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Komal Joshi · Oct 30, 2020 . 5min read