China's Ministry of Public Security first recognized cryptocurrency as a tool for laundering and moving money related to the narcotics trade. According to the China Drug Crimes Report 2021, police eliminated 5.000 drug trafficking cases, including online transactions, last year, accounting for about 9,2% of all drug-related crimes.
The report said:
“The circulation of drug funds has expanded from online bank transfers to cryptocurrencies and in-game currency.”
According to a Chinese media report, the Hangzhou Intermediate People's Court issued a verdict in mid-2020 that a Chinese e-commerce platform executive used Bitcoin to acquire methamphetamine on the dark web in 2018. According to a study report As of January, despite the ban on cryptocurrencies in China, 5.137 criminal cases involving cryptocurrencies were reported in 2021.
The amount of cryptocurrency used in money laundering activities increased by 30% year on year in 2021, according to a Crypto Money Laundering report by Chainalysis. The police investigation matches China's growing anti-crypto rhetoric, which is promoting the use of its own central bank digital money (CBDC).
