Thomas Daniels
China is grappling with a notable rise in corruption and criminal activities associated with cryptocurrencies and digital financial tools.
This issue was a prominent focus at the 2023 Annual Conference of the Chinese Association for the Study of Integrity and Law, as local media reported. The association, sanctioned by the Chinese Law Society, pointed out that advancements in digital currencies and electronic gift cards are being misused for corrupt dealings.
Legal experts, including Professor Mo Hongxian of Wuhan University and Associate Professor Zhao Xuejun of Hebei University, highlighted the increasing difficulty in overseeing these complex forms of corruption. This increase is mainly due to the ramped-up anti-corruption efforts since the 18th National Congress of the Communist Party of China. Corrupt officials and persons are more frequently utilizing digital methods to avoid increased scrutiny.
A specific tactic mentioned was the use of ‘cold storage’ for cryptocurrencies, enabling discreet cross-border asset transfers and trades by corrupt individuals. This approach, which involves storing digital currencies offline on devices like hard drives, makes it harder for law enforcement to trace and prosecute these crimes.
The conference stressed the imperative for China to enhance its legal structure and technological capacity to effectively counter this emerging form of corruption. Legal amendments and the introduction of sophisticated technological solutions for surveillance and enforcement were recognized as essential measures to tackle these issues.
