At a recent meeting, the Central Commission for Political and Legal Affairs of China emphasized the need for a systematic, legal and source-based approach to combat foreign telecom network fraud and related criminal activity. The announcement was made on August 6, 2023, as reported by the Economic Daily.
The commission pointed out that fraud groups are increasingly using new technologies such as blockchain, other way aroundvirtual currency and AI information to update their criminal tools making them more covert and deceptive.
Overseas telecom fraud: a growing concern
In recent years, overseas telecom network fraud groups have lured ordinary people into fraudulent activities under the guise of ‘high-paying job recruitment’. These activities have led to violent detention, human trafficking and a series of shady industrial chains, causing significant damage to the safety of life and property.
The diversity of fraudulent methods, the brutality of coercion and the sheer scale of the amounts defrauded have sparked public outcry. The commission stressed the need to “resolutely uphold the vital interests of the people, firmly uphold social decency, and firmly uphold the authority of the rule of law”.
Organized crime characteristics
The overseas telecom network fraud groups are characterized by tight organization, clear division of labor, multi-sector support, industrial distribution, group operations, and sophisticated division of labor. This has necessitated a strengthening of international law enforcement cooperation and joint efforts with the countries concerned to eradicate fraud dens, rescue detainees and bring the criminal forces and their organizers to justice.
Using new technologies for fraud
The commission noted that fraud groups are using blockchain, metaverse, virtual currency and AI intelligence to continually update their criminal tools, making them more covert and confusing. This requires coordination between public safety, finance, telecommunications and internet departments to adopt advanced technology resources and fulfill regulatory responsibilities.
Efforts are being made to compress online crime space from offline, organize concentrated investigations and removals of risky phone cards and debit cards related to fraud, clean up associated internet accounts and keep network reporting channels running smoothly. Thorough investigations are being conducted into domestic criminal gangs colluding with overseas entities, with every effort being made to shut down the smuggling channels.
There are increasing crimes related to crypto, blockchain, NFT and Metaverse in China.
On July 18, 2023, Chinese authorities in Qingshui County, Shanxi Province, successfully resolved a money laundering case involving the cryptocurrency Tether (USDT). The operation led to the arrest of 21 suspects and the seizure of cash and USDT worth more than 1 million yuan.
The investigation uncovered a complex network of individuals in four counties and six cities who used USDT to launder money for cybercriminals. The criminal group helped settle payments of more than 54.8 million USDT, equivalent to approximately 380 million yuan.
In December 2022, 63 suspects were arrested in Inner Mongolia for USDT money laundering, worth 12 billion yuan.
Public information and education
Public safety and justice departments are urged to further enhance publicity and education to continually increase people’s awareness and ability to identify and prevent telecom network fraud. Special attention is paid to young people entering society, guiding them to be vigilant against opportunistic psychology and herd mentality, and to seek a firm foundation in service to society.
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