As the Chinese government continues to fight cryptocurrencies, officials have discovered how the country’s citizens use the technology to bypass government restrictions and send money out of the country.
As the Chinese government recently announced, many citizens are using cryptocurrencies to send money abroad, especially to neighboring Japan.
This time, the discovery of significant international transactions from China to Japan was made by Japanese regulators.
In the course of an investigation, it was discovered that the Chinese were remitting funds to Japan using cryptocurrencies. Then they converted these funds into Japanese yen.
According to the Chinese government, the discovery came during a Japanese investigation into corporate funds flows. Japan’s National Tax Agency found a channel through a Japanese photography company.
The company opened a bank account primarily focused on alleged Chinese customers. However, he used it as a cover to send Chinese money to Japan.
The company was found to have transacted up to 27 billion yen, equivalent to $235 million in 3 years. In addition, part of the assets was invested in real estate and other products as a way to hide the money.
In what the government called a classic case of money laundering, three were identified. They acted as intermediaries for some Chinese tycoons looking to invest in Japan.
Regulations in China do not allow citizens to exceed the remittance volume of $50,000 per person per year. Any need to exceed this limit requires a proper audit. In addition, the process goes through relevant agencies for proper reporting.
These investors, who were indicted for secretly sending money to Japan, simply exploited the anonymity of transactions made possible by cryptocurrencies.
The government used the case to reinforce its stance on banning cryptocurrency activities.