China is witnessing a rise in instances of corruption and bribery connected to cryptocurrencies and digital financial instruments

China is witnessing a surge in corrupt activities and illicit dealings associated with cryptocurrencies and digital financial instruments. This emerging trend took center stage at the 2023 Annual Conference of the Chinese Association for the Study of Integrity and Law, as per local media reports. The association, a reputable entity sanctioned by the Chinese Law Society, shed light on the exploitation of digital currencies and electronic gift cards in facilitating corrupt transactions.

During the conference, legal experts, including Professor Mo Hongxian from Wuhan University and Associate Professor Zhao Xuejun from Hebei University, underscored the escalating difficulty in monitoring these intricate forms of corruption. This transformation is primarily linked to the more stringent anti-corruption measures enforced since the 18th National Congress of the Communist Party of China. Corrupt individuals, seeking to evade heightened scrutiny, are increasingly turning to the digital realm.

One highlighted technique involves the use of cryptocurrency ‘cold storage,’ enabling corrupt entities to discreetly transfer and trade assets across borders. This method, which entails storing digital currencies offline on physical devices like hard drives, presents a challenge for law enforcement agencies in tracking and prosecuting these illicit activities.

The conference emphasized the pressing need for China to enhance its legal framework and technological capabilities to effectively counter this new wave of corruption. Critical measures identified include legal reforms and the adoption of advanced technological tools for monitoring and enforcement to address these evolving challenges.