China is cracking down more on bitcoin. Florence Lo/Illustration/ReutersChinese crypto addresses sent $2.2 billion worth digital assets to illegal activities.However, transactions have plummeted since then due to the lack of large-scale schemes like the PlusToken scam in 2019Chainalysis published the study on Tuesday, which was conducted between April 2019 - June 2021.Subscribe to our daily newsletter 10 Things Before The Opening Bell.According to Chainalysis, a study that examined cryptocurrency software company Chainalysis on Tuesday found that Chinese cryptocurrency addresses sent $2.2 Billion worth of digital assets between April 2019 to June 2021 to addresses involved in illicit activities.The study found that while the amount was high, it is still significantly lower than previous times due to the absence big Ponzi schemes like the PlusToken scam in 2019. In which Chinese services were used for laundering proceeds, the study stated. The scam cost users between $3 billion and $4 billion.Chainalysis stated that money laundering is another cryptocurrency-based crime. It is a common form and has been of concern to the US when it crosses with sanctions evasion.According to the study, two Chinese nationals were indicted by the US Justice Department for laundering more than $100 million in cryptocurrency in order to aid North Korean syndicates.But by 2020, the US and Russia surpassed China in terms of cryptocurrency-related crimes, widening the gap further in 2021.Apr 2019 - Jun 2021 ChainalysisIn the study period, Chinese cryptocurrency addresses received more than $2 billion in darknet market operations. However, activity began to slow in 2020 due to scams in China. It then picked up again for scams targeting Russia or the US.China's slowdown may also be due to its increasingly strict stance towards the crypto market in recent decades.The study also revealed that authorities arrested more than 1,100 people in June 2021 for cryptocurrency-based money laundering.Chainalysis stated that it would be interesting to see if the arrests result in a decrease in illicit funds flowing to China-based cryptocurrency business and OTC traders.Apr 2019 - Jun 2021 ChainalysisAs regulators tightened their control on the sector, China's position as the world's top cryptocurrency mining country has fallen. Data from the Cambridge Centre for Alternative Finance revealed that China had been responsible for more than 65% of all activity prior to the crackdown.Bitcoin's hashrate has dropped more than half since then, which is a key indicator of the health and stability of the bitcoin network.
