Guangdong district of Southern China witnessed a crackdown that revolved around FIFA gambling racket on July 12, 2018. The racket involved a large portion of cryptocurrencies. Local police in China busted the racket and seized cryptocurrencies worth $1.5 million.
The gambling platform had been under close surveillance since May 2018 as it was claiming to be a gambling platform that would accept the cryptocurrencies too. The platform accepted bitcoin, Ethereum, and Litecoin. The South China Morning Post reported that local police busted a dark web network and have arrested 540 individuals so far. The police continue their investigation and have frozen $1.5 million worth of cryptocurrency and $700,000 in illegal bank accounts.
Chinese legislation passed in 1949 considers gambling illegal. Only state-run welfare games and lotteries qualify as legal activities. The FIFA gambling racket involves around 20 independent gangs and has incorporated 330,000 members. These members were made to join the racket using online chat groups that went to the count of 250 and the racket had launched 70 mobile applications. It took the racket around eight months to create a base of 330,000 members. Around 8,000 agents with gambling experience received heavy commissions from the racket to recruit new members that led to the Ponzi scheme in cryptocurrency.
$1.5 Million in Cryptocurrency Hidden Through Regulatory Gaps
The special investigation team identified some regulatory loopholes that let the racket hide around $1.5 million worth cryptocurrency.
Guangdong police claimed that a heavy activity was in process under their “Online Clean and Secure” and that is what led them to the $1.5 million FIFA gambling racket busting. Authorities built the operation specifically to identify illegal web-based gambling, which was becoming increasingly prevalent during events like the World Cup.
Following the blanket ban on cryptocurrencies in September 2017, Chinese authorities have since been striving to regulate the anonymous trading of digital assets. Amid ongoing scrutiny, cryptocurrency has garnered considerable negative attention for allegedly serving as a medium for illicit activities, including terrorist financing, gambling, and other darknet-related transactions.
Meanwhile, China remained on the front foot in propagating the advantages that blockchain technology brings. In particular, its ICO launches have been remarkably innovative, demonstrating the country’s commitment to leveraging emerging technologies for economic and digital advancement. Chinese officials believe blockchain to be highly disruptive technology and have been empowering the Blockchain technology enthusiasts by offering an incubator as per the 13th five-year plan. Chinese officials, who understand the power of blockchain, have proposed a billion-dollar project.
