China’s crackdown on cryptocurrency is heating up with a series of arrests that suggest digital currency users may be traced.
The country’s Ministry of Public Security said in a statement that more than 1,100 people were arrested on Wednesday for allegedly using cryptocurrencies to profit from fraud. Statement.
The bust involved 170 criminal groups that officials say hired “coin farmers” to open crypto accounts after they seized bank accounts used for their alleged scams.
Regarding the alleged plots, the ministry said, “High illegal income attracts a large number of people to participate, causing serious social harm.”
The arrest may further cast doubt on the alleged un-traceability of cryptocurrencies. On Tuesday, the price of bitcoin fell nearly 12% after it was revealed that US officials were able to recoup most of the bitcoin ransom paid by Colonial Pipeline to hacker group Darkside in May.
“Criminals are using bitcoin because of the government’s inability to obtain it,” Anthony Denier, CEO of trading platform Webble, told the Post on Tuesday. “If governments can bring it back, that hurts its appeal.”
Wednesday’s arrest is part of a wider Chinese crackdown on crypto. They come less than a month after the government called for more regulation of digital currencies.
A committee chaired by a member of China’s Politburo wrote in May that “it is necessary to crack down on bitcoin mining and trading practices and prevent the transmission of personal risks in the social sphere.”
Concerns about bitcoin’s traceability and the impending threat of government regulations have plunged the cryptocurrency from its peak of over $63,000 in April. Bitcoin was trading at around $37,600 on Thursday morning.
Additional reporting by Will Feuer