Zhiyuan Sun7 hours agoChinese police to crack down on crypto and deepfake AIThe move comes as several prominent Chinese blockchain executives have been arrested this year.1266 Total views8 Total sharesListen to article 0:00NewsJoin us on social networksAfter a surge in personal identity thefts and digital financial crimes, Chinese police are more closely scrutinizing the Web3 sector.

During a press conference hosted by China’s Ministry of Public Security on Aug. 10, Jinfeng Sun, political commissar of the Network Security Bureau, said there had been a spree of incidents involving the use of Trojan viruses, phishing sites, infiltration tools and cyberstalkers in fraud and data theft. Specifically, Sun said:“[We have been] monitoring [the use of] Chat GPT, cloud computing, blockchain, deepfake AI and other new emerging technologies, new applications, new organizations [in these incidents]. We [the Ministry] will strike hard at such methods as we research their use.

Sun disclosed that there had been 79 cases of fraud involving deepfake AI, such as impersonation via digital face-swap, leading to the arrest of 515 individuals. On July 18, Shanxi Police arrested 21 individuals allegedly involved in a 54.8 million USDT (USDT) money laundering scheme. The suspects allegedly bought USDT from Chinese residents for below-market value to sell them for fiat on oversea exchanges, banking in the difference while transferring their clients’ money abroad. China imposes strict exit controls on capital, with Chinese nationals prohibited from purchasing more than $50,000 worth of foreign currencies each year. 

Despite strict controls, however, some have accused the Chinese police of embezzling funds from crypto projects through enforcement measures. Last month, cross-chain protocol Multichain became defunct after its CEO, Zhaojun He, was arrested by police. No information has been revealed regarding his detention, while funds belonging to Multichain developers and users alike have been converted to stablecoins and privacy coins and transferred out of the exchange. 

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