Chinese police begin to detain cryptocurrency traders

As Chinese police step up efforts to crack down on illegal economic activity,activities, crypto-OTC merchants are delayed to facilitate investigations.

Another sign that law enforcementauthorities in China are targeting cryptocurrency traders, Zhao Dong, a prominent Chinese over-the-counter cryptocurrency trader and co-founder of crypto lending platform RenrenBit, has been detained by police in the city of Hangzhou. The rumor that Zhao had been taken away first appeared on WeChat on Thursday after a screenshot of his detention began circulating in the local community, which was later reported by local media.

Since the rumor has attracted wider attention,given Zhao’s outstanding status, a RenrenBit spokesman said in a statement on Weibo’s social networking platform that one unnamed box office in Beijing had taken his entire police team late last month. It appears that not one of the OTC merchants was arrested.

RenrenBit said that Zhao, whoinvested in the team, but did not participate in daily trading, returned to China from Japan in early June and now "actively" helps the local police in investigating cases of fraud and money laundering. ,

In 2017, the Chinese government banned localtraders trade cryptocurrency in relation to the RMB on the exchange. As a result, many traders turned to over-the-counter platforms, which, in essence, allow for mutual trading, connecting buyers and sellers.

Zhao is currently held by the police. This issue has also caused some fear among other over-the-counter offices in China.

According to this person, since mid-Junelaw enforcement agencies in the Chinese provinces have tightened control over crypto-OTC tables and selected more than one chamber of commerce to assist in money laundering investigations. But the news about Zhao has attracted increasing attention as he is well known as one of the largest OTC traders in China and has been a member of the crypto community of China since 2013.

Although recent investigations do not necessarily indicate that buying or selling off-exchange cryptocurrency is illegal.

Recent Chinese Police Actions Followedafter a wide blocking of the bank account, which was reported in early June, when it is estimated that more than 1,000 people were affected. At that time, a wide range of over-the-counter offices and users in China had their bank accounts frozen by law enforcement due to suspicions that they knowingly or unknowingly promote illegal activities, such as telecommunications fraud, to launder proceeds through crypto-OTC trading .

Cryptocurrencies, especially USDT pegged to the dollar, have been a popular method for scams and various schemes for organizers of money laundering fraud in China.

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