Over-the-counter crypto trader Sun Xiaoxiao on Friday, June 5, announced on his Weibo page that his bank accounts had been frozen.
According to Sun, this is due to an investigation by the police about cryptocurrency transactions related to illegal activities. He claims that these measures could affect "several thousand people."
It is unclear what kind of case the police are investigating. According to Sun, it’s rather unusual that the police decided to freeze bank accounts for “dirty” cryptocurrency. In the past, accounts were blocked when someone tried to convert cryptocurrencies to Chinese yuan but did not know that the fiat received was somehow related to money laundering.
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“There are over-the-counter traders who have frozen bank accounts due to questions about the source of the coins they bought. That is, now, in addition to “dirty money,” we have “dirty coins,” writes Sun.
According to him, in China, there is an increase in the use of cryptocurrencies for transferring shadow capital, but if earlier bitcoin was the most popular choice for such transactions, now it is replaced by the Tether stablecoin (USDT). “The police started using blockchain analysis to track assets,” Sun said.
Since September 2017, when the central bank of China banned ICOs and blocked direct access to fiat accounts for Chinese crypto exchanges, the OTC market was the only way to buy a cryptocurrency for RMB.