China Warns Citizens of Consequences for ‘Facilitating’ Crypto Trades

A Chinese ministry has warned citizens of the severe consequences of “facilitating” crypto transactions on behalf of other people.

The nation has exacted two sweeping crackdowns on crypto, one in 2017, and the other in 2021.

The first crackdown mainly targeted crypto exchanges, forcing most brokers and trading platforms away from the Mainland.

The second crackdown forced banks to shut down crypto-related transactions and outlawed crypto mining.

Regardless, many Chinese traders remain crypto-keen.

And Cryptonews.com has seen evidence of a thriving Chinese over-the-counter trade in coins in 2023, with USDT and Bitcoin trades seemingly the most popular.

21st Century Business Herald (via Stockstar) reported that there has been a rise in social media posts uploaded by people attempting to recruit third-party crypto transfer “accomplices.”

One such post read as follows:

“Help people transfer and remit money to earn thousands of dollars a day. It’s easy!”

These “recruiters” say that they are posting lucrative “side jobs.”

But the Ministry of Public Security warned that individuals who take part in these “schemes” are “very likely to commit the crime of assisting IT network fraud.”

The ministry, as well as legal and IT researchers, warned that “fixed-term” jail sentences and fines await those convicted of such crimes.

Why Do Some Chinese Citizens Want to ‘Facilitate’ Crypto Trades?

The media outlet gave the example of an individual surnamed Geng who reportedly processed almost $1 million worth of crypto-related transactions through his personal bank accounts.

Geng, police said, received a “favor fee” of up to around $418 for each transaction.

But Geng and his associates have since been charged with a range of crimes, the media outlet noted.

China’s updated criminal code details that “helping others to use information networks to commit crimes, and providing Internet access, hosting servers, providing network storage, and providing communication services” are punishable. 

The code can be applied to those facilitating crypto trading on behalf of others, experts warned.

If courts judge that the crimes are “serious,” perpetrators can be fined and jailed for up to three years.

Two other individuals, both surnamed Li, were sentenced to six to eight months in jail for using their own bank accounts to help others buy crypto.

The ministry and associated researchers claimed that “the most common form of cryptoasset-related crime” in 2022 was money laundering, which accounted for 55% of the year’s total.

A further 21% cases were related to fraud, while gambling and pyramid schemes both accounted for a smaller number.

Last month, a group of stablecoin operators was detained by police in Shanghai.