Chinese Government Seize BTC ETH USDT in Crypto Crackdown
The government of China has continued with the enforcement of the ban on cryptocurrencies. The enforcement has been diligent, leaving no stones unturned. Any venture that is crypto-related discovered by the government to operate within the borders of China immediately faces the wrath of the law enforcement agencies.
In one of the latest raids by the government, a crypto-based pyramid scheme with over 100,000 registered members was uncovered, and different kinds of cryptocurrencies were seized, including Bitcoin, Ethereum, and Tether.
The pyramid scheme was uncovered by the police in Xuzhou, and it involved a total of 110,000 members from all over the country. This population of participants qualifies the scheme as one of the biggest crypto-based pyramid schemes in China. Apart from the cryptocurrencies seized, an additional 1 billion yuan was also seized by the Chinese authorities.
The Chinese authorities explained that the pyramid scheme has existed since 2019, operating for about two years. According to the authorities, it is a fraudulent scheme that claims to operate a virtual currency pledge mining through a platform called “BBGO”. Victims of the scheme were said to have been lured with the promise of high returns on their investment. A pattern that is familiar to most Ponzi and pyramid schemes, both in China and in different parts of the world.
According to the police in Xuzhou, tracking down the operators of this pyramid scheme took a couple of months. The police said that it got a tip-off in April by one of the victims of the scheme, and ever since, it has been working diligently to achieve its aim of cracking down on the platform.
This successful crackdown registered another milestone for China in its fight against cryptocurrencies since the ban of 2021. It is enforcements like this that differentiate the current ban from the ones of previous years.
For many years, since the creation of cryptocurrencies, China has been at the forefront of criticizing and leading the campaign against the technology. All these years, while the government reiterated its stands against cryptocurrencies, it spread further and propagated more, especially within the country’s borders.
China became the global hub for cryptocurrencies with over 60% of the hashrate for Bitcoin coming from there. This was primarily a result of the location of most of the mining rigs in the country.
The crypto ban of 2021 has rewritten and is still rewriting this story. First, cryptocurrency miners faced a fierce confrontation, causing most of them to relocate to more friendly regions. Those who could not relocate shut down completely. This was followed by a close-marking of all crypto-related activities, of which the recent clampdown falls into.
Enforcements like this form the difference between the crypto ban of previous years and that of 2021. Coinciding with the period when China is seriously pursuing a CBDC project raised the suspicion that the ban is a technical elimination of the competition that cryptocurrencies will pose to the adoption of the digital yuan.
China has denied this idea anyway, insisting that banning cryptocurrencies was a necessary move to sanitize its financial industry and eliminate fraudulent transactions. So far, several clampdowns have been initiated with arrests and seizures made. However, the recent clampdown and crypto seizure suggests that there may still be more crypto practitioners operating underground within the country. Yet, it is certain that the government is not relenting in its effort to achieve a crypto-free China.