Blockchain cybercrimes trigger action from China’s national prosecutor

Zhang Xiaojin, the director of the Fourth Procuratorate of the SPP, also reportedly warned citizens and digital asset participants about investment scams in the local crypto economy.

In a bid to tackle rising cybercrimes, the Supreme People’s Procuratorate (SPP) of China — the country’s highest prosecutorial authority — is targeting criminals using blockchain and metaverse projects for illegal activities. The SPP says it is alarmed by the increase in online fraud, cyber violence and personal information infringement.

The SPP reported a significant rise in cybercrimes committed on blockchains and within the metaverse. Criminals increasingly use cryptocurrencies for money laundering, making it difficult to trace their illicit wealth.

Ge Xiaoyan, deputy prosecutor-general of the SPP, stated that cybercrime-related telecom fraud charges have risen by 64 percent year-on-year. While blockchain-related crimes are rising, traditional crimes such as gambling, theft, pyramid schemes, and counterfeiting have also expanded into cyberspace.

Xiaoyan emphasized that charges related to internet theft have increased by nearly 23%, while charges related to online counterfeiting and sales of inferior goods have surged by almost 86%.

Procuratorates pressed charges against 280,000 individuals in cybercrime cases between January and November. This reflects a 36% year-on-year increase, constituting 19% of all criminal offenses, as reported by Xiaoyan.

Zhang Xiaojin, the director of the Fourth Procuratorate of the SPP, also warned citizens and digital asset participants about investment scams in the local crypto economy.

Related: Cryptocurrency thrives in China against odds, report says

Xiaojin pointed to the rise of new cybercrimes using the metaverse, blockchain and binary options platforms, stating that digital currencies have become hotspots for these activities, highlighting the need for heightened vigilance.

China’s efforts to crack down on digital asset-related crimes differ from Hong Kong’s. The special administrative region of China has taken a different approach by implementing crypto-friendly regulations to standardize its digital asset ecosystem and protect investors without stifling innovation.

The People’s Bank of China (PBoC) addressed issues related to cryptocurrency regulation and decentralized finance in its latest financial stability report. The Chinese central bank devoted a separate section to cryptocurrency assets in the report, stressing the need for the industry to be regulated using joint efforts by different countries.

In 2021, the PBoC officially announced measures to fight against crypto adoption in mainland China, pushing for stronger inter-departmental coordination in cracking down on crypto activity in the country. Mainland China has remained a major crypto-mining hub despite the ban covering virtually all crypto transactions and cryptocurrency mining.