China has raised alarm over corrupt officials leveraging cold storage cryptocurrency accounts to illegally transfer money out of the country. This development comes after a series of recent seizures connected to Chinese government and military officials.
China’s Ministry of Public Security issued a statement warning that corrupt officials have been exploiting the anonymity afforded by cold storage cryptocurrency accounts to illegally transfer large sums of money out of the nation’s banks and financial institutions. A warning from the Ministry further revealed that the officials have used these accounts to evade taxation and disguise the transfer of illicit funds.
The Ministry also noted that these funds have been used to purchase high-end assets and goods outside the country, particularly in countries whose currencies are less intertwined with the Chinese domestic market. This has been an increasingly problematic issue in recent years, as several officials have been caught exploiting loopholes in the system to move finances out of the country.
The Ministry is now implementing further measures to curb such illicit activities. In particular, it is urging citizens to “degrade their use of cryptocurrency to purchase assets, clean up their own social networks, and strengthen the supervision of foreign currency loans.”
Hopefully, with these preventative measures, China will be able to maintain closer view of its financial system and tighten control over illicit cross-border transactions.
