A Chinese state-owned newspaper has warned that corrupt officials could be funneling crypto into cold storage to avoid investigations.
Legal Daily, a media outlet directly under the control of the Chinese Communist Party (CCP), notes in a new report that experts at the China Integrity and Legal Research Association’s 2023 annual meeting drew attention to the ways new technology like digital assets have enabled bribery.
Zhao Xuejun, an associate professor at Hebei University Law School, reportedly says corrupt Chinese government personnel use offline, cold storage methods to avoid online investigations and take crypto assets abroad.
Mo Hongxian, a professor at Wuhan University Law School, tells Legal Daily that governance and regulation need to adapt to the modern types of corruption that crypto enables.
“For example, there are two problems with the use of virtual currencies such as Bitcoin to commit corruption. First, it is difficult to crack down on supervision, especially distributed peer-to-peer virtual currencies such as encrypted digital currencies, which exist without the ‘medium’ of institutions such as banks and use keys. The way of conducting transactions and the characteristics of anonymity provide natural convenience for illegal and criminal activities.
Second, it is difficult to identify and process. For example, virtual currencies such as Bitcoin are not recognized by our country, but in reality they serve as equivalent functions. How to identify and process handling is also an issue that requires attention in judicial practice.”
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