- China is creating new conditions for approved virtual asset exchanges.
- The Chinese digital asset regulator decided this due to the recent FTX fraud.
- Recently, China arrested 63 people for a case involving a $1.7 billion crypto fraud.
A Chinese digital asset regulator has expressed contempt at the recent bankruptcy of the FTX crypto exchange, given that it affected other virtual asset businesses in China. It also described FTX’s case as one of failed regulatory oversight.
It further argued that many other jurisdictions adopted looser standards to regulate asset service providers from the perspective of anti-money laundering or payment. Consequently, China Securities Regulatory Commission (SRC) is drafting regulatory requirements for licensed virtual asset exchanges under a system and will launch public consultations soon.
Notably, according to a local media report, the new regulatory framework in the virtual assets industry will primarily focus on investor protection. The statement read in part:
“Hong Kong has adopted comprehensive supervision in response to the operation of relevant exchanges similar to securities brokers, requiring the business to properly separate client assets in a trusted manner and regularly submit audited accounts and financial information.”
In other news, Coin Edition reported yesterday that China police authority cracked a money laundering gang responsible for siphoning over 12 billion Yuan, equivalent to $1.7 billion, using crypto. The operation took a task force comprising 230 police officers who spent three months scouring 17 provinces, cities, and autonomous areas before arresting the 63 suspects, including the leaders.
Similarly, in September, the Hengyang County Public Security Bureau announced the successful crackdown on a monumental electronic money laundering case. The crime involved 40 billion yuan, equivalent to over $5.5 billion, laundered by 94 suspects via cryptocurrency.
The police recovered 300 million yuan in cash and 7.8 million yuan worth of economic assets and confiscated over 100 mobile phones and computers.
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