Chinese Cops Nab 15 in Crypto-Linked Gambling Operation, Seize $3.8M in Digital Currency

Posted on: April 20, 2021, 01:37h. 

Last updated on: April 20, 2021, 10:33h.

Ed Silverstein @casinoorgedsilv Read More
Expertise: Legal, Tribal Gaming.

An online and allegedly illegal gambling operation based on EOS cryptocurrency was raided recently by police in China. Some 15 suspects were arrested and over $3.8 million worth of cryptocurrency was seized, according to a published report.

$3.8 million worth of cryptocurrency was seized
Scenic view of Yancheng, China shown here. Police in the city recently broke up what they claim is an illegal gambling operation. It used digital currency. (Image: Trip.com)

The Block, a cryptocurrency news site, explained the operation was based on the EOS digital gambling app. It employed the dApp, called Biggame, the report adds.

This lets players use EOS smart contracts to place bets on Dice, Texas Hold’em, and other games. It is reportedly the first time smart contracts were used in an illegal online gaming operation in China, The Block added.

Yancheng police began scrutinizing the gaming operation last October, according to Toutiao, a news site based in China. The city is located in the northeastern province of Jiangsu. Authorities analyzed 27 million transactions.

Then, in December, police raided operations in Guangzhou, Shanghai, Suzhou, and other cities.

Since 2018, the operation led to at least $10 million in revenue for the organizers, The Block said.

Last year, police in the region broke up a PlusToken Ponzi scheme. Since the last quarter of 2020, close to 100 suspects were found guilty in court for laundering money through crypto methods in China.

Chinese Police Promise Quick Detection

Guo Gang, a public security director in China, recently told China Central Television (CCTV), a state-controlled TV network, “This is a crime with a high intelligence quotient. No matter how complicated the case is, our police will make every effort to chase, intercept, and detect it quickly.”

On the legal side of things, China has begun using lotteries to test its new digital currency, DCEP (Digital Currency Electronic Payment).

In January, Shenzhen was to conduct its second lottery to pay out prizes exclusively in the new currency, following a successful debut draw last October.

The People’s Bank of China (PBoC) announced the creation of DCEP in November last year. DCEP is the world’s first state-backed cryptocurrency. But it prompted concern in the West that Beijing is exploring the creation of a completely cashless society, upon which it can exert greater control.

China’s state-run lotteries are the only opportunities to gamble legally on the mainland. Included are the Welfare Lottery, a traditional lottery draw, as well as sports lotteries. In sports lotteries, participants are invited to predict the outcomes of a series of games, usually domestic and international soccer matches.

Enforcement of gambling laws continues in the region. In Hong Kong, earlier this month, a local police officer was among the 65 suspects apprehended during a raid of an alleged illegal gambling joint located in the Kwun Tong neighborhood. The officer was one of three suspected operators of an illicit poker room, according to the South China Morning Post, a regional newspaper, based on police allegations.

Big Data Employed

Basically, all forms of gambling in the People’s Republic of China are outlawed, with the state-run national lottery the lone exception. Commercial casinos can also be found in the Special Administrative Region (SAR) of Macau.

Last September, officials in China also said they’re using big data to crack down on citizens exiting the People’s Republic to gamble.