Report: $ 50 billion worth of cryptocurrencies are smuggled out of China
Report: $ 50 billion worth of cryptocurrencies are smuggled out of China

A new report claims that more than $ 50 billion in cryptocurrencies were transferred from Chinese digital wallets to other parts of the world last year, indicating the ability of Chinese investors to send more money than the amount approved abroad.

Only Chinese citizens are allowed to purchase up to 50,000 USD in foreign currency from financial institutions every year. In the past, wealthy citizens used foreign investments in real estate and other assets to avoid roadsides. However, the government has cracked down on these methods, according to a report from the Chainalysis Forensic Society.

“Over the past 12 months, due to the impact of the trade war and the depreciation of the renminbi on the Chinese economy, more than $ 50 billion in cryptocurrencies have been diverted from addresses in China to addresses abroad,” Chenalesis said.

Chainalysis sells compliance and investigation software to companies and governments. Of course, this is not entirely capital evasion, the report adds, but we can consider $ 50 billion as the absolute capital limit for the flow of cryptocurrencies from East Asia to the East. ”Other regions.

Cryptocurrency holders are using the controversial Tether coin to transfer money. Please note that a stable currency is a digital currency that is usually backed by another asset or group of other assets to stabilize its value and reduce volatility. Tether claims to be linked to the US dollar.

A stable currency is useful in converting a large number of cryptocurrencies. Because in theory you shouldn't see the value of cryptocurrencies which move people in extreme volatility.

According to Chainalysis, a total of more than $ 18 billion has been diverted from East Asia to other regions by Tether in the past 12 months. Plus, all of this is unlikely to be a capital flight. ''

Chinese miners turning their newly minted coins into a rope and sending them to foreign exchanges can explain some of these activities. Note that a miner is someone who has a computer that specializes in solving complex mathematical problems in order to obtain a new cryptocurrency. In solving these complex problems, the miners are given a cryptocurrency.

However, the report also revealed that in some news events, Tether's traffic has increased dramatically. Chinese President Xi Jinping has expressed support for blockchain technology, which is part of the foundation for many digital currencies. After the heavy selling in mid-March, bitcoin prices recovered.

"At that time, the US and Chinese equity markets were still dropping, and the renminbi itself was also falling," said Chenalesis. The reasons why international exchanges can trade when exchange rates fluctuate. Encoded "high".

And China has already taken a tough stance on cryptocurrencies. In 2017, Beijing banned fund-raising in cryptocurrency and local exchanges known as initial coin offerings (ICOs). However, Xi Jinping supports blockchain technology while the Chinese central bank is currently developing its own digital currency.

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