A Chinese state-run newspaper has warned that corrupt officials could send crypto to cold storage to avoid investigations.
Legal Daily, a media outlet directly controlled by the Chinese Communist Party (CCP), notes in a new report that experts at the 2023 annual meeting of the China Integrity and Legal Research Association drew attention to the ways in which new technology , such as digital assets, has made bribery possible.
Zhao Xuejun, an associate professor at Hebei University Law School, reportedly says corrupt Chinese government personnel are using offline, cold storage methods to avoid online investigations and move crypto assets abroad.
Mo Hongxian, a professor at Wuhan University Law School, tells Legal Daily that governance and regulation must adapt to the modern forms of corruption that crypto enables.
“For example, there are two problems with using virtual currencies like Bitcoin to commit corruption. First, it is difficult to crack down on surveillance, especially when it comes to distributed peer-to-peer virtual currencies, such as encrypted digital currencies, which exist without the ‘medium’ of institutions like banks and use keys. The way transactions are carried out and the features of anonymity naturally provide 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 serve equivalent functions. Identifying and processing the settlement is also an issue that requires attention in legal practice.”
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