Saturday, July 20, 2024

China’s State Administration of Foreign Exchange (SAFE) has taken decisive action against an illicit crypto operation valued at $2.2 billion. This clandestine enterprise utilized cryptocurrency as a means to provide unlawful exchange services, thereby evading established exchange controls.

SAFE’s intervention, as reported in a Wechat post, revealed that the Qingdao police successfully identified more than 1,000 accounts linked to a Chinese national named Jin. These accounts played a pivotal role in facilitating the exchange of 15.8 billion yuan ($2.2 billion) within the crypto sphere. Notably, this extensive exchange network operated across 17 provinces within China, managing over 20 million transactions.

The accounts were closely associated with Li, a textile worker acting as a broker for the purchase and sale of virtual currencies. The report emphasized that engaging in cryptocurrency management and exchange is categorically illegal in China.

Xu Xiao, an inspector at the Qingdao Branch of the State Administration of Foreign Exchange, elucidated the modus operandi of this illicit operation. He explained that underground banks acquire virtual currencies and subsequently transact them through overseas trading platforms to obtain the requisite foreign currency. This process effectively circumvents the legal channels for converting yuan into foreign currencies, constituting a violation of foreign exchange laws.

Furthermore, it’s crucial to underline that such currency exchanges must occur exclusively at state-designated venues. SAFE authorities have issued stern warnings against involvement in this type of illegal trade, emphasizing the importance of adhering to legal channels, even when the allure of exchange rates and convenience might tempt individuals toward unlawful practices.

Huang Hui, Deputy Director of SAFE’s Management and Inspection Department, underscored the organization’s commitment to collaborating with other state institutions to combat illegal exchange operations, including underground banks. Their ultimate goal is to promote the utilization of legal avenues for financial transactions, ensuring compliance with regulatory frameworks.

In conclusion, SAFE’s recent crackdown on this sizable crypto exchange ring reflects China’s unwavering stance on upholding financial regulations and preserving the integrity of its currency control mechanisms. This resolute action underscores the government’s dedication to curbing illegal financial activities, safeguarding its financial system, and encouraging compliance with established legal procedures.

Frequently Asked Questions (FAQs) about Crypto Exchange Crackdown

What prompted the crackdown on the crypto exchange ring by SAFE?

The crackdown on the crypto exchange ring by China’s State Administration of Foreign Exchange (SAFE) was prompted by the discovery of an underground bank using cryptocurrency to provide illegal yuan exchange services.

How extensive was the operation of the crypto exchange ring?

The crypto exchange ring had a significant reach, operating in 17 provinces across China and conducting over 20 million transactions related to its illegal exchange activities.

Who were the key individuals involved in this operation?

The accounts linked to the exchange ring were associated with a Chinese national named Jin, who played a central role in the operation. Additionally, Li, a textile worker, acted as a broker for the purchase and sale of virtual currencies within the network.

What is the process through which the illicit exchange operation worked?

Underground banks within the exchange ring purchased virtual currencies and then sold these assets through overseas trading platforms to acquire the foreign currency they needed. This process effectively evaded legal channels for converting yuan into foreign currencies, constituting a violation of foreign exchange laws.

What are the consequences for individuals involved in illegal crypto exchange activities?

SAFE authorities have issued stern warnings against involvement in illegal crypto exchange activities. Engaging in such activities can lead to legal consequences as cryptocurrency management and exchange are deemed illegal in China.

What is SAFE’s commitment regarding these illegal exchange businesses?

Huang Hui, Deputy Director of SAFE’s Management and Inspection Department, emphasized SAFE’s commitment to collaborating with other state institutions to crack down on illegal exchange businesses, particularly underground banks. The aim is to promote the use of legal channels for financial transactions and ensure compliance with regulatory frameworks.

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5 comments

EconWatcher22 December 26, 2023 - 6:22 pm

SAFE’s on fire! Gotta stay legal in China’s crypto world.

Reply
FinanceGuru123 December 26, 2023 - 7:10 pm

Li was a texile worker, but ended up messin’ with cryptos! Crazy!

Reply
CryptoExpert87 December 26, 2023 - 11:43 pm

wow, safes like, “no way u can do illegal stuff wit crypto!” They got these dudes good!

Reply
InvestorChamp December 27, 2023 - 5:10 am

China’s strict, illegal crypto biz is a risky game!

Reply
PolicyNerd December 27, 2023 - 12:37 pm

dis crackdown is BIG, 2.2B dollars is no small change!

Reply

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