Bitcoin Crackdown: China arrested over 1,100 people for crypto-related money laundering

The idea behind cryptocurrency is that it is decentralized, secure, and anonymous. That makes it very appealing to cybercriminals who use them for money laundering, ransomware, other illegal uses. But government around the world are stepping up their crackdowns on these criminals.

Today, police in China arrested over 1,100 people suspected of using bitcoin and other cryptocurrencies to launder illegal proceeds from telephone and Internet scams in a recent crackdown, according to a report from Reuters, citing the Ministry of Public Security. The arrests came as authorities in China step up their crackdown on cryptocurrency trading.

As we reported last month, China also banned financial institutions and payment companies from providing services through cryptocurrency transactions. Three Chinese banking and payment industry bodies banned financial institutions not to conduct virtual currency-related business, including trading or exchanging fiat currency for cryptocurrency,

The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money. The money launderers charged their criminal clients a commission of 1.5% to 5% to convert illegal proceeds into virtual currencies via crypto exchanges, the ministry said via its official Wechat account.

Meanwhile, cybercriminals raked in over $3.25 billion annually from social media-enabled cybercrime as enterprises infected with crypto-mining malware doubled. Since 2017 there has been a 400 to 600 percent increase in the amount of crypto mining malware being detected globally, the vast majority of which has been found on social media platforms.

Of the top 20 global websites that host crypto mining software, 11 are social media platforms like Twitter and Facebook. Apps, adverts, and links have been the primary delivery mechanism for crypto mining software on social platforms, with the majority of malware detected by this research mining Monero (80 percent) and Bitcoin (10 percent), earning $250m per year for cybercriminals.