When it comes to the development of crypto assets, in addition to the United States, China in particular is of outstanding importance.

More than $ 150 million went to Chinese addresses in 2020.

Only Americans received more than 450 million dollars more, shows data from the blockchain data service provider Chainalysis, which claims to provide authorities, stock exchanges, financial service providers and cybersecurity companies in more than 60 countries with data.

Germany comes in ninth place with around 80 million dollars.

Martin Hock

Editor in business.

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For a long time, China was also a leader when it came to illegal activities with cryptocurrencies. Between April 2019 and June 2021, more than four billion dollars for fraudulent and darknet activities via Chinese addresses changed hands. The main activities included the financing of the trade in the opioid fentanyl as well as money laundering transactions in connection with North Korea.

But the authorities in China are increasingly taking action against it. The United States and Russia overtook China a long time ago. And it's not the only part of the crypto industry where the country has lost its dominance. Until May, China's role in the production (mining) of Bitcoin was much higher than it is today. The share in the creation of Bitcoin temporarily reached 65 percent internationally. Low electricity prices made the operation of large computer networks attractive.

But in May, the party leadership began to take action against the manufacturers, after previously focusing on the crypto exchanges. One reason given was that mining, because of its high energy consumption, is harmful to the environment and also endangers financial stability. Since then, production has shrunk massively. The five largest manufacturer networks (mining pools) in the country were still producing around half of Bitcoin at the beginning of July as at the beginning of May. The BTC.top pool closed completely in China.

The scene sees the leadership's approach as motivated differently than it is officially justified. The party's goals are stability and unity. If Bitcoin miners get rich and demand freedom and self-determination, they will be viewed as dissidents, Chainalysis quotes an anonymous miner. Experts surveyed by the data service provider also see efforts to introduce a digital yuan as politically motivated: It is also about fine-tuning monetary policy, but also about data collection and control of the population.

Internationally, it could also be a long-term goal to shape international economic relations bypassing the dollar and process payments via bilateral central bank transactions with automated currency exchange. Another goal could be to undermine American sanctions - which is why the management has also allowed extensive partnerships with Iranian companies, for example.

Overall, China has recognized the potential of cryptocurrencies and blockchain and wants to ensure that these serve the party goals, the analysts at Chainalysis conclude. So while China is trying to turn the anarchic element into a dictatorial one, governments and authorities in the West remain suspicious. The new head of the US Securities and Exchange Commission, Gary Gensler, had signaled openness to the approval of an ETF on Bitcoin futures contracts. For this, however, investors would have to provide significantly higher security deposits. In addition, Gensler criticized the fact that cryptocurrencies currently do not offer sufficient investor protection, it is "more like in the Wild West". The Bitcoin price initially fell on Wednesday morning, but then recovered.