$11.4 Billion in Crypto-Based Transactions Flowed Out of China in 2019 Despite Ban: Report

Chinese President Xi Jinping’s call for blockchain adoption really has everyone optimistic that the Chinese central government might also look to regulate crypto trading. However, those hopes came crashing down as the news of the crackdown on crypto service providers in China followed just a few days after the President’s much-talked Blockchain adoption speech.

Peckshield, a blockchain security firm in China recently published its “2019 Global Digital Asset AML Research Report” which studied a number of crypto trends in the country and also noted that the flow of money via cryptocurrencies out of the country rose to a whopping $11.4 billion. The said amount was a combination of unregulated as well as illegal crypto transactions originating from the country and was being sent to some other nation.

The problem of capital flight has emerged in several nations where the regulations around crypto are too strict or completely banned. China banned any foreign crypto exchanges back in 2017, however, the recent reports are evidence that it has little to no effect on people who want to deal and trade cryptocurrencies. The movement of money out of the country via cryptocurrencies has gone down from $17.9 billion in 2018, but it is still higher than the 2017 figure of around $10 billion.

Scams and Darknet Transactions Contributed the Most to The Capital Flight

Peckshield’s research team tracked crypto transaction data from studying the nodes of a number of public blockchains such as Bitcoin, Ethereum, EOS, and Tron. The study found that apart from traders sending money outside the country, several pyramids and multi-level marketing scams contributed the most to the outflow of capital via digital currencies.

OneCoin scam in particular which siphoned billions worldwide was also responsible for a major chunk of capital flowing outside China. Similarly, PlusToken was another similar scam that caused its investors in millions.

The research also noted the role of darknet websites who often only accept crypto transactions in Bitcoin or privacy coins. Peckshield’s study claimed there are around 60,000 darknet websites that were responsible for moving 546,825 BTC from China in 2019. The figure was significantly higher than the 2018’s 334,329 BTC. The study concluded that every year the number of Bitcoin going into darknet websites and then to a cryptocurrency exchange is getting higher every year.

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Lillian Peter
Lillian Peter
Lillian P has a knack for anything that teases the mind, with a keen interest in the blockchain technology, cryptocurrencies, and anything in between. Can bring to life the most difficult and boring concepts in the blockchain space. Lillian is a brilliant writer working with various publications.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


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