Xinhua News Agency, Beijing, October 8th. Title: Organizing "buyers", platform matching, selling and cashing out... the "black hands" that cut off the "whitewashing" of stolen funds in virtual currencies
Xinhua News Agency "Xinhua Viewpoint" reporters Wu Yu, Wu Guangyu, Zhu Guoliang
Recently, ten departments including the People's Bank of China issued documents to further prevent and deal with the risks of speculation in virtual currency transactions.
Since the beginning of this year, the public security department has eliminated a number of gangs that used virtual currency to launder money. Criminals organized "buyers", matched platforms, and sold them for cash... In this black industry chain, illegally obtained funds were first turned into virtual currency, and then "Laundering" funds into legal tender.
How did virtual currencies become money laundering tools step by step?
How to combat this new type of money laundering crime?
Abnormal funds lead to special money laundering cases
In November 2020, a company in Xichang City, Liangshan Yi Autonomous Prefecture, Sichuan Province was defrauded of 5.9 million yuan by a fraud group.
In the process of investigating the case, the police discovered that a large amount of funds were quickly transferred and "laundered" by the suspect in a short period of time, so they quickly frozen hundreds of accounts involved in the case.
However, at this time, a group of accounts filed an appeal for unfreezing, claiming that they were only conducting virtual currency transactions.
Is it really "injury"?
The investigators have stepped up their follow-up investigations, and a gang that uses virtual currency to defraud money laundering in telecommunications networks has gradually surfaced.
The police investigation of the task force found that the members of the criminal gang organized dozens of "buyers" in Changsha, Hunan, Chengdu, Sichuan and other places under the unified organization and arrangement of the previous family.
Using the Huobi account and bank card account provided by the "buyer", the criminal suspect opened rooms in multiple hotels around the country, received the stolen money involved in the upstream case, bought virtual currencies such as Bitcoin, and transferred the stolen money from the telecommunications network.
After a large number of investigations and related evidence in the early stage, the police carried out arrest operations in many places.
As of press time, the police have arrested 29 suspects, of which 20 were involved in virtual currency transactions and money laundering, and the amount involved was more than 6 million yuan.
Jiang Pengfei, a policeman from the Criminal Investigation Brigade of the Public Security Bureau of Xichang City, told reporters that since the public security organs launched the "Card Broken Operation" nationwide in October 2020, some criminals have changed the traditional method of cash laundering through domestic bank cards and used virtual currency. Transfer of stolen money and money laundering.
Coincidentally, the Jianhu police in Yancheng, Jiangsu also successfully cracked an online gambling case. Gamblers used virtual currency to place bets on gambling websites, and then cashed out illegal proceeds into legal tender through the virtual currency trading platform.
In December 2020, after more than a month of investigation, the police arrested more than 20 criminal suspects in Shanghai, Guangzhou, and Chuzhou, Anhui, and seized more than 1.3 million virtual currencies worth more than 26 million yuan.
According to Chao Kejian, director of the Anti-Money Laundering Bureau of the People’s Bank of China, the virtual currency represented by Bitcoin has the characteristics of anonymity, borderless, and peer-to-peer. Criminals convert illegal gains into virtual currency and use anonymity to cover up the true source of criminal funds. The rapid transfer in various parts of the world makes it difficult for the regulatory and law enforcement agencies to track.
How does virtual currency "launder" the stolen money step by step?
How does virtual currency break through laws and regulations and "launder" stolen money?
Analyzing several cases that have been detected, we can roughly understand the "whitewashing" process.
——Organize "buyers" to train virtual currency trading online.
The reporter learned from the police that money laundering gangs often use WeChat and QQ groups to publish information such as "swiping orders", "running points", and "providing accounts to earn money". They organize "buyers" in many places and ask them to download virtual currency trading platform mobile phones. Application software, and use personal and other people's information to register an account.
Subsequently, the suspect led the "buyer" to the encrypted chat software for online training, and instructed the virtual currency trading operations in detail.
——Illegal funds are transferred to the "buyer" account, and the platform matches over-the-counter transactions.
The money laundering gang provided the prepared collection account information to the upstream criminal suspect. After the illegally obtained funds such as fraud and gambling were transferred to the collection account, the criminal suspect organized "buyers" to bring mobile phones and bank cards for offline operations.
Under the virtual currency trading platform matching, the "buyer" finds the virtual currency seller on the platform, uses the platform to communicate information, and privately completes the payment with the seller using WeChat, Alipay, bank account, etc., and then proposes the virtual currency to the designated through the platform Wallet address.
——Withdrawing and transferring remittances to foreign countries step by step, selling on the platform for cash out.
In order to avoid investigation, the criminal suspect will transfer the virtual currency obtained through different wallet address accounts step by step, sometimes using online "hot wallet", sometimes even using offline "cold wallet", and finally remit to the wallet of the suspect of overseas money laundering address.
After collecting a large amount of "stolen coins", the criminal suspects transferred the "stolen coins" to the purse of the gang responsible for cashing in the country, and then traded and sold them on the virtual currency trading platform for cash out.
So far, the money laundering gang has completed the process of "laundering" illegally obtained funds to virtual currency and then to legal currency.
Technical risk control and institutional supervision need to be "two-pronged"
Relevant departments in my country have long noticed that virtual currency transactions are prone to the risks of illegal cross-border transfer of assets, money laundering and other illegal and criminal activities. Related documents have been issued many times to require financial institutions and payment institutions not to carry out or participate in virtual currency-related business activities. Domestic virtual currency The trading platform has also been basically eliminated.
However, cutting off this black money laundering industry chain still faces considerable challenges.
On the one hand, many virtual currency trading platforms have placed their servers overseas to match the point-to-point transactions between buyers and sellers in order to avoid supervision; on the other hand, the wallet address of virtual currency does not require real-name registration, and the transaction process is relatively complicated and does not pass targeted analysis. The program is difficult to trace.
These have increased the difficulty of monitoring, prevention and control.
"Virtual currency transfer is separated from the transfer of funds in the domestic financial system. Domestic financial institutions can only see RMB transfers between domestic individuals. It is difficult to identify virtual currency transactions. Virtual currency money laundering cases that have been discovered are mainly from upstream It was discovered after the criminal investigation." Chao Kejian said that with the recent increase in relevant crackdowns, the fund transaction mode of domestic virtual currency trading has become increasingly decentralized, the concealment has been further improved, and the difficulty of tracking and monitoring has increased.
Jiang Pengfei said that technical problems need new technologies to solve. Only by insisting on the “dual-pronged approach” of technical risk control and institutional supervision can the black industry chain of virtual currency money laundering be cut off.
The realization of virtual currency transactions depends on the information release and exchange between buyers and sellers, and effective monitoring and blocking measures can be taken from the inflow of information.
Ten departments including the People's Bank of China recently issued the "Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Speculation", putting forward a series of work measures and establishing a normalized work mechanism for departmental coordination and central-local linkage.
The notice specifically proposes to strengthen the monitoring and early warning of the risk of speculation in virtual currency transactions, continue to carry out in-depth "special actions against money laundering crimes", and severely crack down on criminal activities such as money laundering and gambling using virtual currencies in accordance with the law.
The police remind the general public that they should take good care of their ID cards, bank cards, mobile phone cards, etc., and do not easily lend or sell them to others; keep their bank card accounts, collection codes and other related information to avoid being used by criminals; increase risks Awareness, not to participate in virtual currency trading hype activities.