China’s Supreme People’s Procuratorate has vowed to crack down on criminals using blockchain technology and metaverse projects for illegal activities. During a press conference on Feb. 23, spokesperson Li Xuehui highlighted a rise in cybercrime on blockchains and in the metaverse, with cryptocurrency money laundering becoming a common method for illicit activities.

Director Zhang Xiaojin of the Fourth Procuratorate of the Supreme People’s Procuratorate warned against investment scams promising high returns with low risks in the local crypto market. He urged citizens and digital asset participants to be wary of evolving criminal tactics, such as the “pig butchering” scheme, where scammers lure victims into investing in fraudulent digital asset projects or exchanges before disappearing with their funds. Last year, U.S. authorities seized over $9 million in Tether’s USDT stablecoin linked to this type of scam.

Throughout 2023, Chinese authorities prosecuted more than 42,000 individuals involved in electronic fraud and crypto-related scams. Moving forward, the procuratorial organs will implement the directives of the 20th National Congress of the Communist Party of China to enhance Internet legal oversight and ensure a favorable online environment.

China’s intensified crackdown on blockchain-related crimes coincides with a surge in illicit activities in Hong Kong. Crypto crime in the region has tripled since 2021, according to reports. Despite this, Hong Kong has been working on implementing crypto-friendly regulations to regulate the digital asset ecosystem and safeguard investors while fostering innovation.

With the introduction of a licensing system for compliant businesses, Hong Kong may even permit spot Bitcoin ETFs to trade on local exchanges, following the approval of 11 issuers by the U.S. SEC. In contrast, China has banned crypto trading and mining since 2021, although it has made progress in central bank digital currencies (CBDCs) and web3 regulatory frameworks.

For more information on the latest developments in the cryptocurrency space, stay tuned to Global Crypto News.

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